Are you looking for dividend shares to buy for passive income? If you are, then it could be a good idea to check out the two listed below that Morgans rates highly.
Here's what the broker is saying about them:
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Aurizon Holdings Ltd (ASX: AZJ)
The first ASX dividend share that Morgans is tipping as a buy is Aurizon.
It is Australia's largest rail freight operator, connecting miners, primary producers, and industry with international and domestic markets via its extensive national rail and road network.
With its shares trading within touching distance of their 52-week low, Morgans sees a lot of value in them at present. The broker commented:
We are not yet convinced that the capital AZJ is deploying into the lower quality Bulk business (both One Rail Bulk acquisition and growth capex) to diversify its operations away from coal exports and tap into new growth avenues will deliver appropriate risk-adjusted returns over time. Nonetheless, we see value in the stock at current prices, supported by the far higher quality Network and Coal haulage businesses. ADD retained.
As for dividends, it has pencilled in partially franked dividends of 17 cents per share in FY 2023 and then 19 cents per share in FY 2024. Based on the latest Aurizon share price of $3.36, this will mean yields of 5% and 5.65%, respectively.
Morgans currently has an add rating and $3.81 price target on its shares.
HomeCo Daily Needs REIT (ASX: HDN)
Another ASX dividend share that Morgans has named as a buy is HomeCo Daily Needs.
It is a property investment company with a focus on properties that serve daily needs. These are metro-located, convenience-based assets across neighbourhood retail, large format retail, and health and services. basis.
The broker believes the company is well-placed for the future thanks to its development pipeline. It commented:
HDN offers investors exposure to a portfolio of daily needs assets with its large development pipeline to provide both near-term and future growth opportunities. FY23 guidance was reiterated; metrics stable across the $4.7bn portfolio; and cap rate expansion was offset by property income growth. Looking ahead, the focus also remains on recycling assets and the development pipeline which has been boosted to +$600m from +$500m.
As for dividends, the broker is forecasting dividends per share of 8.3 cents in FY 2023 and 8.4 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.16, this will mean dividend yields of 7.15% and 7.25%, respectively.
Morgans has an add rating and $1.50 price target on HomeCo Daily Needs' shares.
