Morgans says these ASX dividend shares are top buys

The broker has good things to say about these income options this month.

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If you are searching for some ASX dividend shares to buy then it could be worth checking out the two listed below.

Both have been named on Morgans' best ideas list again this month and tipped to provide attractive dividend yields in the near term. Here's what you need to know:

HomeCo Daily Needs REIT (ASX: HDN)

The first ASX dividend share that analysts at Morgans are positive on right now is HomeCo Daily Needs. The broker currently has an add rating and $1.37 price target on the neighbourhood retail and large format retail focused property company's shares.

Morgans is very positive on HomeCo Daily Needs' outlook thanks to favourable trends and its resilient tenants. It said:

HDN's $4.7bn portfolio is focused on daily needs assets (Large Format Retail; Neighbourhood; and Health & Services) across +50 properties with the top 3 tenants Bunnings, Coles and Woolworths. 70% of leases are fixed; 21% linked to CPI; and 9% based on supermarket turnover. The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support 'last mile logistics'. Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.

As for dividends, Morgans expects dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.26, this will mean yields of 6.3% and 7.1%, respectively.

QBE Insurance Group Ltd (ASX: QBE)

Another ASX dividend share that Morgans is bullish on right now is QBE. It has an add rating and $20.00 price target on the insurance giant's shares.

The broker believes the company's valuation is cheap based on its positive outlook. It said:

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.

In respect to income, Morgans expects the company to pay dividends per share of 99 cents in FY 2024 and then 108 cents in FY 2025. Based on the current QBE share price of $17.68, this will mean yields of 5.6% and 6.1%, 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 recommended HomeCo Daily Needs REIT. 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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