Fortunately, in this low interest rate environment, there are countless dividend shares for investors to choose from on the Australian share market.
But with so many to choose from, it can be hard to decide which ones to buy. To narrow things down, I have picked out three ASX dividend shares that brokers think investors should buy:
Humm Group Ltd (ASX: HUM)
According to a note out Macquarie, its analysts have retained their outperform rating and $1.30 price target on this financial services company. This follows the release of its third quarter update this week. The broker notes that Humm is a profitable buy now pay later provider and is expecting it to share its profits with shareholders in the form of dividends. It is forecasting a dividend per share of 3.4 cents per share in FY 2021. And thanks to provision releases in FY 2022, it expects Humm's dividend to increase to 6.6 cents per share next year. Based on the current Humm share price of 95.2 cents, this will mean fully franked dividend yields of 3.6% and 6.9%, respectively.
Rio Tinto Limited (ASX: RIO)
A note out of Ord Minnett reveals that its analysts have a buy rating and $161.00 price target on this mining giant's shares. Thanks to strong iron ore and copper prices, the broker believes Rio Tinto is well-placed to deliver bumper earnings and dividends in the coming years. Ord Minnett is forecasting fully franked dividends of ~$13.48 per share in FY 2021 and ~$11.22 per share in FY 2022. Based on the latest Rio Tinto share price of $126.01, this will mean 10.7% and 8.9% yields, respectively, over the next couple of years.
Telstra Corporation Ltd (ASX: TLS)
Another note out of Ord Minnett reveals that its analysts have retained their buy rating and lifted their price target on this telco giant's shares to $4.10. The broker lifted its price target to reflect both Optus and Telstra increasing their mobile plan prices. Ord Minnett expects this to result in an increase in its average revenue per user (ARPU) metric in FY 2022. This should be supportive of its earnings and dividends in the near future. As a result, Ord Minnett continues to forecast fully franked dividends per share of 16 cents in FY 2021 and FY 2022. With the Telstra share price trading at $3.45, this will mean yields of 4.6%.
