3 ASX shares below $5 with huge passive income potential

Want to grow your passive income? Then check out these shares that analysts say are buys.

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The Australian share market certainly is a great place to generate a passive income.

And while many income investors will go straight to the banks or BHP Group Ltd (ASX: BHP) for their big dividend yields, there are other ways to go about things.

For example, there are a number of ASX shares that have the potential to grow their dividends materially over the long term. This could supercharge your passive income if everything goes to plan.

But which ASX shares are we talking about? Three that come highly recommended by analysts and can be bought for less than $5 per share are listed below:

Accent Group Ltd (ASX: AX1)

Analysts at Bell Potter are feeling very positive about this retailer and distributor of performance and lifestyle footwear. In fact, the broker believes this ASX share could provide investors with a very attractive source of passive income over the coming years.

Its analysts are forecasting fully franked dividends per share of 11.8 cents in FY 2024, 13.7 cents in FY 2025, and 15.7 cents in FY 2026. This would mean dividend yields of 6.3%, 7.3%, and 8.35%, respectively. Bell Potter also sees plenty of upside for its shares with its buy rating and $2.50 price target.

Pilbara Minerals Ltd (ASX: PLS)

If you're bullish on lithium and have a higher-than-average tolerance for risk, then it could be worth considering this mining giant.

Especially when Macquarie is forecasting big dividend yields in the coming years. It has pencilled in dividends per share of 20 cents in FY 2024 and then 35 cents in FY 2025. This equates to yields of 5.1% and 9%, respectively.

Macquarie has an outperform rating and a $7.30 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX share that could boost your passive income is youth fashion retailer Universal Store.

While trading conditions are tough in the retail sector, Morgans expects the company to still be in a position to pay fully franked dividends of 26 cents per share in FY 2024 and 29 cents per share in FY 2025. This implies yields of 8% and 8.9%, respectively.

Morgans has an add rating and a $4.25 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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