Why CBA (ASX:CBA) and this dividend share could be buys

CBA and this dividend share could be in the buy zone…

With savings accounts and term deposits still providing very low interest rates, the share market arguably remains the best place to earn a passive income.

But which ASX dividend shares should you consider buying? Two to consider are listed below:

customer making payment at a cafe using CBA albert

Image Source: Commonwealth Bank

Commonwealth Bank of Australia (ASX: CBA)

The first ASX dividend share to look at is Commonwealth Bank. This banking giant's shares have pulled back significantly recently due to the release of a disappointing first quarter update which revealed margin pressure from intense competition for home loans.

One broker that is sticking with Australia's largest bank is Bell Potter. In response to the release, its analysts retained their buy rating but trimmed their price target to $111.00.

Bell Potter likes CBA due to its position as the leader in home lending and retail deposits, its strong balance sheet with significant surplus capital and opportunities to add value via SME banking, wealth management, and selective Asian expansion.

As for dividends, the broker is forecasting fully franked dividends per share of $3.94 in FY 2022 and $4.15 in FY 2023. Based on the current CBA share price of $97.95, this will mean yields of 4% and 4.2%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share for income investors to look at is Transurban. It is a toll road operator with a collection of important roads in Australia and North America. It also has a number of development projects that look set to underpin its growth in the next decade.

The team at Morgans is a fan of Transurban and notes that the company provides investors with exposure to regional population and employment growth and urbanisation.

Morgans currently has an add rating and $14.79 price target on the company's shares.

In respect to dividends, the broker has pencilled in dividends per share of 39 cents in FY 2022 and then 57 cents in FY 2023. Based on the current Transurban share price of $13.98, this will mean yields of 2.8% and 4.1%, respectively.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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