Morgans names the best ASX dividend shares to buy in May

These top dividend shares tick a lot of boxes for analysts at Morgans.

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There are plenty of quality ASX dividend shares to choose from on the Australian share market.

But which ones are buys?

Three that have been tipped as best ideas by analysts at Morgans in May are listed below. Here's why they could be worth a look:

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

The first ASX dividend share to look at according to Morgans is coal terminal operator Dalrymple Bay Infrastructure. It has an add rating and $3.03 price target on its shares.

The broker notes that the lack of appetite from ESG-focused investors means its shares are trading on low multiples and offering big yields. It said:

While DBI faces coal-related ESG headwinds, we think the stock may be attractive to income-oriented investors given its attractive cash yield (21.5 cps DPS guidance for the 12 months to June 2024). Furthermore, its CPI-linked and high margin revenues and numerous risk mitigants are enticing attributes for investors looking for a defensive element to their portfolios. Potential share price catalysts are value accretive organic capital investment and takeover potential.

Morgans expects dividend yields of 7.6% in FY 2024 and 7.8% in FY 2025.

QBE Insurance Group Ltd (ASX: QBE)

Morgans believes that QBE would be a great option for income investors. It has an add rating and $17.96 price target on its shares.

This bullish view is due largely to its attractive valuation, rate increases, and cost reductions. The broker explains:

With strong rate increases still flowing through QBE's insurance book, and further cost-out benefits to come, we expect QBE's earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on 8x FY24F PE.

Its analysts are forecasting partially franked dividend yields of 5.6% in FY 2024 and 6.1% in FY 2025.

Woodside Energy Group Ltd (ASX: WDS)

The broker also has this energy giant's shares on its best ideas list with an add rating and $36.00 price target.

Its analysts think Woodside could be an ASX dividend share to buy thanks to its quality earnings and recent share price weakness. They said:

A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS's share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.

Morgans is forecasting fully franked dividend yields of 4.4% in FY 2024 and then 5.6% in FY 2025.

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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