There are plenty of options for income investors to choose from on the Australian share market.
But which ASX shares are analysts tipping as buys? Two that have been given the thumbs up recently are listed below.
Here's what analysts are saying about them:
Lottery Corporation Ltd (ASX: TLC)
The first ASX dividend stock that analysts rate highly is Lottery Corporation. It is the lottery company behind OZ Lotto, Powerball, and Keno.
The team at Citi is positive on Lottery Corp. This is due to its defensive qualities and recent price increases, which it believes the market "underestimates the uplift [they will have] to the contribution margin." It adds:
We still expect Oz Lotto will normalise from its poor jackpot run and believe there is upside to the company's normalised revenue guidance. Moreover, our earlier work suggests most of the Powerball price increases are being retained. Finally, we retain our view that the Lotteries VC margin should rise by ~100 bps in FY24e and the starting point for VC margin is ~30bps higher than anticipated.
Citi has a buy rating and a $5.70 price target on its shares.
As for dividends, the broker is forecasting 18 cents per share dividends in both FY 2024 and FY 2025. Based on the latest Lottery Corporation share price of $4.57, this will mean fully franked yields of 3.9%.
National Australia Bank Ltd (ASX: NAB)
Another ASX dividend share that has been named as a buy is big four bank, NAB.
Goldman Sachs is a fan of the bank and believes it is one of two to buy in the current environment. It explains:
Our Buy rating on NAB is predicated on: i) while lending competition is intense, it has been skewed more heavily towards housing as opposed to business (refer here), which should benefit NAB's relative earnings mix, ii) NAB has delivered the highest levels of productivity over the last three years and its investments continue to yield benefits (A$400 mn of productivity expected in FY24E), which we think leaves it well positioned for an environment of elevated inflationary pressure.
Goldman has a buy rating and a $30.52 price target on its shares.
The broker is forecasting fully franked dividends of $1.62 per share in both FY 2024 and FY 2025. Based on the current NAB share price of $27.75, this implies yields of 5.8%.
