Buy these ASX stocks for 4% and 8% dividend yields

Analysts have good things to say about these buy-rated income stocks.

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Luckily for income investors, there are plenty of ASX income stocks to choose from on the Australian share market.

However, with so many to choose from, it can be hard to decide which ones to buy above others.

But don't worry, that's because analysts have been doing the hard work for you and have picked out two stocks that they rate as buys for income investors.

Here's what you need to know about them:

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that this supermarket giant would be a great option for income investors.

In fact, the broker is so bullish it added the company's shares to its best ideas list this month. The broker said:

In our view, the ongoing scrutiny on the supermarkets has affected short term sentiment in the sector, which we believe creates a good buying opportunity in COL. While Liquor sales remain soft, we expect the core Supermarkets division (~92% of earnings) to continue to be supported by further improvement in product availability, reduction in total loss, greater in-home consumption due to cost-of-living pressures, and population growth.

Morgans has an add rating and $18.95 price target on its shares.

In respect to income, the broker is expecting fully franked dividends per share of 66 cents in FY 2024 and 69 cents in FY 2025. Based on the latest Coles share price of $16.24, this equates to dividend yields of 4.1% and 4.25%, respectively.

Dexus Convenience Retail REIT (ASX: DXC)

The Dexus Convenience Retail REIT could be an ASX income stock to buy now. That's the view of analysts at Bell Potter, which are very positive on the service stations and convenience retail focused real estate investment trust.

Bell Potter highlights that the company could offer investors compelling returns. This includes a very big dividend yield. It said:

Sub-sector with a high level of ownership from privates and HNW's means petrol stations are typically more liquid that any commercial real estate that carries larger cheque sizes. Management has actively recycled capital leading to a balance sheet with low headroom & ICR risk. Compelling risk-adjusted returns: DXC offers a yield c.8% based on mid-point of FY24 DPS guidance. While we do see asset values declining (BPe 30bp cap rate expansion), trading at a 27% discount to NTA and 10% discount to BPe NAV looks too punitive to us for a defensive sub-sector.

The broker has a buy rating and $3.00 price target on its shares.

As for dividends, Bell Potter is forecasting dividends per share of 20.9 cents in FY 2024 and 20.7 cents in FY 2025. Based on its current share price of $2.61 this equates to yields of 8% and 7.9%, respectively.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 positions in and has recommended Coles 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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