Are you building an income portfolio? If you are, you might want to take a look at these buy-rated ASX dividend shares.
Here's what you need to know about them:
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Transurban Group (ASX: TCL)
The first ASX dividend share to look at this toll road operator. Transurban is the company behind major roads such as CityLink in Melbourne and the Cross City Tunnel and Eastern Distributor in Sydney.
While the pandemic hit the company hard due to a significant reduction in mobility, traffic volumes are increasing now. For example, weekly traffic on its Melbourne roads was down just 12% on 2019's levels in April.
And given the significant time-savings that its road offer, these volumes are expected to continue to rise as life returns to normal and our other (non-toll) roads get busier again.
Ord Minnett is a fan of Transurban and is forecasting a recovery in its dividends in the near future. The broker expects dividends of 37 cents per share in FY 2021 and 58 cents per share in FY 2022. Based on the current Transurban share price, this will mean yields of 2.6% and 4.1%, respectively.
The broker has a buy rating and $16.00 price target on its shares.
Westpac Banking Corp (ASX: WBC)
Another ASX dividend share to consider is Westpac. This banking giant has been recovering very quickly from the pandemic.
For example, it recently released its half year results and revealed cash earnings of $3,537 million. This was a 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020.
Positively, with the banking sector's outlook continuing to improve and Australia's economic recovery remaining strong, the medium term looks very positive for the bank and its shareholders.
Morgan Stanley is positive on the company. It has an overweight rating and $29.20 price target on its shares. The broker is also expecting Westpac to pay fully franked dividends per share of $1.18 and $1.25 over the next two years.
Based on the latest Westpac share price, this will mean yields of 4.7% and 5%.
