The Australian share market is a great place to generate a passive income.
That's because there are lots of ASX shares that pay out a portion of their profits twice a year to their lucky shareholders.
But given the vast number of options out there, it can be hard to decide which ones to buy over others.
Let's take a look at two ASX shares that have been named as buys and could be a good source of passive income:
Accent Group Ltd (ASX: AX1)
Accent Group could be a great ASX share to buy if you are looking for passive income from your investments.
It is the owner of numerous footwear focused retail store brands such as HypeDC, Stylerunner, Platypus, and The Athlete's Foot.
Its shares have fallen out of favour with investors over the last 12 months. This has seen them lose approximately 14% of their value over the period.
Bell Potter sees this as a very attractive buying opportunity for investors. Particularly given its expectation for some very juicy dividend yields from its shares.
For example, the broker expects Accent to pay fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.75, this represents dividend yields of 7.4% and 8.3%, respectively.
If its analysts are accurate with their estimates, a $10,000 investment would yield $740 and $830 in dividends over the next two financial years.
Bell Potter currently has a buy rating and $2.50 price target on its shares. This implies potential upside of almost 43% for investors.
Telstra Corporation Ltd (ASX: TLS)
This telco giant's shares have been well and truly out of form over the last 12 months. So much so, Telstra's shares are now down over 20% since this time last year.
This has been driven by Telstra being treated as a bond proxy by investors and disappointment over a recent trading update.
While this is disappointing, it could prove to be a buying opportunity for income investors. Especially given how this decline has made the potential dividend yields on offer with its shares even more attractive.
For example, Goldman Sachs is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.46, this would mean yields of 5.2% and 5.35%, respectively.
To put that into context, a $10,000 investment would return $520 and $535 in dividends.
In addition, with a buy rating and price target of $4.25, Goldman Sachs sees scope for this ASX share to rise almost 23% over the next 12 months.
