If you would like to strengthen your income portfolio with some new additions next week, then it could be worth considering the ASX dividend shares listed below that brokers rate as buys.
Here's why they are feeling bullish about these dividend shares:
Transurban Group (ASX: TCL)
The first ASX dividend share that brokers say could be a buy is Transurban. It manages and develops urban toll road networks in Australia and North America. This includes the Cross City Tunnel, Eastern Distributor, and Citylink.
Citi is positive on the company and recently upgraded its shares to a buy rating with a $16.20 price target. It believes Transurban is well-placed thanks to inflation-linked price increases and its defensive qualities. The broker explains:
We upgrade TCL to Buy from Neutral given upside to CPI linked tolls, with limited upside to debt costs given long-term hedging. Roll-out of the project pipeline should drive growth in free cash flow and distribution over time, with potential for further expansion to the portfolio. While TCL's bid for Eastlink and a potential capital raising can't be ruled out yet, we believe the stock is providing attractive value here at 23x EV/EBITDA, especially given the defensiveness of income and CPI benefits.
As for dividends, Citi is expecting dividends per share of 58 cents in FY 2023 and 62 cents in FY 2024. Based on the current Transurban share price of $14.31, this will mean dividend yields of 4% and 4.3%, respectively.
Universal Store Holdings Ltd (ASX: UNI)
Another ASX dividend share for income investors to consider buying next week is youth fashion retailer Universal Store.
Morgans remains positive on the company and has an add rating and a $4.20 price target on its shares. It believes Universal Store's shares are trading at a very attractive level for investors. Particularly given its multi-pronged growth opportunity. It said:
UNI is a well-managed business with opportunities to grow through multiple avenues.
In respect to dividends, the broker is expecting the company to pay fully franked dividends per share of 27 cents in both FY 2023 and FY 2024. Based on the current Universal Store of $3.47, this will mean yields of 7.8% in both years.
