Buy these ASX dividend shares instead of term deposits

These dividend shares are expected to offer big yields.

| More on:
Man holding out $50 and $100 notes in his hands, symbolising ex dividend.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Although the yields on term deposits have improved significantly over the last 12 months, they still don't compare to some of the dividend yields you can find on the Australian share market.

For example, as well as decent upside potential, analysts are forecasting big yields from these ASX dividend shares in the near term. Here's what they expect:

QBE Insurance Group Ltd (ASX: QBE)

Goldman Sachs believes that this insurance giant is in the buy zone. This is because it believes that rates "earned over the next 12 months will like be well ahead of moderating inflation to offset reinsurance / perils cost pressure and likely support improving underlying trends."

The broker currently has a buy and $18.34 price target on QBE's shares.

In respect to dividends, the broker is forecasting dividends of 60 US cents (92 cents) per share in FY 2024 and 62 US cents (95 cents) per share in FY 2025. Based on the current QBE share price of $14.77, this will mean yields of 6.2% and 6.4%, respectively.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could offer term deposit-beating yields is agricultural property company Rural Funds.

Bell Potter is very positive on the company. It notes that its shares are trading at their "largest discount to market NAV since listing."

The broker currently has a buy rating and a $2.40 price target on its shares.

As for income, its analysts are forecasting dividends per share of 11.7 cents in FY 2024 and FY 2025. Based on the current Rural Funds share price of $1.95, this will mean yields of 6% for investors.

Universal Store Holdings Ltd (ASX: UNI)

Youth fashion retailer Universal Store could be another ASX dividend share to buy.

That's the view of analysts at Morgans, which believe its shares are "undervalued" at current levels. The broker has an add rating and a $4.25 price target on its shares.

As for dividends, Morgans is forecasting fully franked dividends of 26 cents in FY 2024 and then 29 cents in FY 2025. Based on the latest Universal Store share price of $3.50, this equates to yields of 7.4% and 8.3%, respectively.

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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

2 ASX 200 dividend shares that could be strong buys this month

Analysts reckon income investors should be snapping up these shares while they can.

Read more »

A mature aged man with grey hair and glasses holds a fan of Australian hundred dollar bills up against his mouth and looks skywards with his eyes as though he is thinking what he might do with the cash.
Dividend Investing

Here's the Fortescue dividend forecast through to 2026

Analysts predict continuing strong dividends in 2024 but the outlook is significantly different for 2025 and 2026.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

An 8% yield on CBA shares? Here's how these passive income investors achieved it!

CBA pleased passive income investors with a 2.4% interim dividend boost.

Read more »

businessman handing $100 note to another in supermarket aisle representing woolworths share price
Consumer Staples & Discretionary Shares

How is the Coles share price down 3% today?

Coles investors should be delighted with the company's share price drop today.

Read more »

Falling yellow arrow with descending wooden bars with the percentage sign written on them.
Dividend Investing

3 all-star ASX dividend stocks I'd own in retirement to combat falling interest rates

I reckon these three dividend stocks will be worth holding when rates are cut.

Read more »

A man points at a paper as he holds an alarm clock.
Dividend Investing

Move quickly if you want to receive the Super Retail dividend

It won't be long until this retailer pays its next dividend.

Read more »

Woman smiling with her hands behind her back on her couch, symbolising passive income.
Investing Strategies

Investing in an ASX share portfolio for lifelong passive income!

It’s never too late to begin investing in quality ASX shares to build up a lifelong passive income stream.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Dividend Investing

Forget AGL: Buy this magnificent ASX utilities stock instead

The dividends are flowing from this stock.

Read more »