If you're wanting to build an income portfolio and have $500 to invest, then it could be worth considering the three ASX dividend shares listed below.
Here's why they could be good options for those funds:
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Coles Group Ltd (ASX: COL)
The first ASX dividend share for smart investors to consider buying is Coles.
It is a supermarket giant with over 800 stores across the country. In addition, it has a liquor network comprising almost 1,000 stores across several brands. These include Liquorland and Vintage Cellars.
Morgans is a fan of the company. It was pleased with its first-half results but even more pleased to see its supermarkets outperform its main rival early in the second half.
In light of this, the broker is now forecasting fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $16.30, this will mean dividend yields of 4% and 4.2%, respectively.
Morgans currently has an add rating and an $18.70 price target on its shares.
Transurban Group (ASX: TCL)
Another ASX dividend share to consider for that $500 investment is Transurban.
It is one of the world's leading toll road operators, building and operating toll roads in Australia and North America. Among its portfolio are CityLink in Melbourne, the Eastern Distributor in Sydney, AirportlinkM7 in Brisbane, and 95 Express Lanes in the United States.
Citi is very positive on the company's outlook. In fact, its analysts believe the company will outperform expectations in FY 2024 and pay a dividend bigger than its guidance.
It is expecting dividends per share of 63 cents in FY 2024 and then 65 cents in FY 2025. Based on the current Transurban share price of $12.89, this will mean yields of 4.9% and 5%, respectively.
Citi has a buy rating and a $15.60 price target on its shares.
Universal Store Holdings Ltd (ASX: UNI)
Universal Store could be a third ASX dividend share to buy. It is the youth fashion retailer behind the eponymous Universal Store brands, as well as the Perfect Stranger, Thrills, and Worship brands.
Morgans is also a fan of the company. This is partly due to "UNI's focus on offering high quality, fashionable apparel in a well-presented store environment with high levels of service is paying off."
The broker expects this focus to support the payment of fully franked dividends per share of 26 cents in FY 2024 and 29 cents in FY 2025. Based on the current Universal Store share price of $5.50, this will mean yields of 4.7% and 5.3%, respectively.
Morgans has an add rating and a $6.50 price target on its shares.
