There are plenty of passive income options on the Australian share market to choose from. Two top ASX 200 dividend shares that brokers rate highly are listed below.
Here's why they have been named as buys:
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Endeavour Group Ltd (ASX: EDV)
Goldman Sachs believes that this drinks company could be a quality option for investors right now. Its analysts currently have a buy rating and $7.80 price target on the company's shares.
The broker likes the company due to its industry-leading position and attractive valuation. It commented:
Xmas trading has been strong as evidenced by liquor retail sales acceleration and pubs growth feedback from peers is accelerating into Jan 2023. Our sensitivity analysis suggests the risk of cashless gaming is already largely priced in. […] EDV now trades at 19.7x FY24 P/E vs historical average of 24.3x and is value entry point for a high quality industry leader.
As for dividends, the broker is forecasting fully franked dividend of approximately 21.4 cents per share in FY 2023 and 24 cents per share in FY 2024. Based on the current Endeavour share price of $6.62, this equates to yields of 3.2% and 3.6%, respectively.
Telstra Group Ltd (ASX: TLS)
Analysts at Morgans believe that Telstra could be a quality dividend share to buy. The broker is a fan of the telco giant and has a buy rating and $4.65 price target on its shares.
Morgans likes Telstra due to its successful turnaround, positive outlook, and valuation. In respect to the latter, the broker feels Telstra's assets are worth more than the market is pricing in. It said:
After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra's legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS's high quality long life assets like InfraCo are worth substantially more, in our view. We don't think this is in the price so see it as value generating for TLS shareholders.
As for dividends, the broker is forecasting fully franked dividends per share of 16.5 cents in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.15, this will mean yields of 4%.
