2 of the top dividend shares in Australia

Analysts have put buy ratings on these income stocks.

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Income investors are a lucky bunch. The Australian share market is home to a large number of dividend shares.

But which two could be among the best to buy right now? Let's take a look at a couple that analysts are tipping as top buys:

Transurban Group (ASX: TCL)

Bell Potter thinks that Transurban could be one of the best Australian dividend shares to buy. It manages and develops urban toll road networks in Australia and the United States.

The broker likes the company due to its positive exposure to inflation and low risk cashflows. It said:

We believe the current inflationary environment is favourable for Transurban given its inflation-linked revenue stream with annual escalators. Moreover, TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience. The group's current pipeline of growth projects is $3.3 billion (TCL's share of total project cost) and further huge development opportunities are expected over the next few decades, supported by population and economic growth.

Bell Potter is forecasting dividends per share of 63.6 cents in FY 2024 and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.81, this will mean dividend yields of 5% and 5.1%, respectively.

The broker has a buy rating and $15.50 price target on its shares.

Woodside Energy Group Ltd (ASX: WDS)

Morgans thinks that Woodside Energy could be a top income share to buy right now. It is one of the world's largest energy producers with high-quality operations across the globe.

The broker likes the company due to its "high-quality earnings" and attractive valuation. It 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. Increasing our conviction in our call is the progress WDS is making through the current capex phase, while maintaining a healthy balance sheet and healthy dividend profile. WDS still has to address long-term issues in its fundamentals (such as declining production from key projects NWS/Pluto), but will still generate substantial high-quality earnings for years to come.

In respect to dividends, Morgans is forecasting Woodside to pay fully franked dividends of $1.25 per share in FY 2024 and then $1.57 per share in FY 2025. Based on its current share price of $27.96, this represents dividend yields of 4.5% and 5.6%, respectively.

The broker has an add rating and $36.00 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. 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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