Analysts name 2 ASX dividend shares to buy now

Here's why they think income investors should be buying these shares.

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Deciding which ASX dividend shares to buy can be a gruelling process.

Luckily for income investors, analysts have done a lot of the hard work for you and picked out two they think are buys.

Here's what they are saying about these dividend shares:

Acrow Ltd (ASX: ACF)

The team at Morgans thinks that Acrow could be an ASX dividend share to buy. It provides the construction sector with engineered formwork, scaffolding, and screen systems solutions.

Morgans has an add rating and a $1.43 price target on its shares. The broker likes the company due to its positive outlook, attractive valuation, and generous forecast dividend yield. It said:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long term, especially on the east coast. Momentum remains strong and recent acquisitions will provide new avenues for growth, especially in the more stable and less cyclical Industrial Services segment. We believe the valuation remains attractive (~7.5x FY25F PE and ~5.5% yield) with potential positive catalysts from further meaningful contract wins.

Morgans is forecasting fully franked dividends of 5.5 cents per share in FY 2024 and then 5.9 cents per share in FY 2025. Based on the current Acrow share price of $1.16, this will mean dividend yields of 4.75% and 5%, respectively.

GUD Holdings Limited (ASX: GUD)

Analysts at Bell Potter think that this auto parts company would be a good ASX dividend share to buy.

The broker has the company on its favoured list with a buy rating and a $12.80 price target on its shares. Its analysts believe the company is well-positioned to benefit from supply constraints and the resilience of the legacy auto business. It commented:

The company recently reported an impressive FY23 result with NPAT of $119 million beating Citi forecast by 3% and consensus by 14%. This was driven by the better-than-expected APG performance (the highest-quality business in GUD, in our view) and the improvement in gearing. We see GUD as well-placed to benefit from the ongoing improvement in OEM supply constraints into FY24. Overall, our Buy rating for GUD is predicated on the relative resilience of the legacy auto business and improving momentum in new car sales, which should be favourable for APG's earnings.

As for income, Bell Potter is forecasting fully franked dividends per share of 38.5 cents in FY 2024 and then 40.4 cents in FY 2025. Based on the current GUD share price of $10.57, this equates to dividend yields of 3.65% and 3.8%, 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 Acrow. 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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