Thanks to rising interest rates, the yields on offer with term deposits have improved materially over the last 12 months.
However, as attractive as they may look, they still don't come close to some of the dividend yields you will find on the Australian share market.
For example, the two ASX dividend shares listed below have been tipped to provide very generous yields in the coming years.
In addition, with price targets higher than where they currently trade, there are potential capital gains on offer for investors as well.
Here's what analysts are saying about these ASX dividend shares:
ANZ Group Holdings Ltd (ASX: ANZ)
Analysts at Goldman Sachs believe that ANZ Bank would be a great option for investors right now.
The broker is expecting fully franked dividends of $1.62 per share each year between FY 2023 and FY 2025. Based on the current ANZ share price of $24.34, this implies potential dividend yields of 6.65% for income investors.
In addition, with a buy rating and $27.55 price target, Goldman sees scope for ANZ's shares to rise 13% over the next 12 months.
Universal Store Holdings Ltd (ASX: UNI)
Another ASX dividend share that could smash term deposits is Universal Store. It is a youth fashion retailer that analysts at Morgans rate highly.
They expect some big fully franked dividend yields in the near term. The broker has pencilled in a 26 cents per share dividend in FY 2024 and then a 29 cents per share dividend in FY 2025. This would mean yields of 7.2% and 8%, respectively.
Morgans also sees plenty of room for Universal Store's shares to rise from current levels. The broker has an add rating and a $4.25 price target, which implies an upside of 18% for investors.
