Yesterday was a good day for Westpac Banking Corp (ASX: WBC) shareholders.
That's because it was pay day!
The banking giant rewarded its loyal shareholders with a fully franked 90 cents per share interim dividend.
And while some shareholders may have opted to use the bank's dividend reinvestment program, others may now be looking for somewhere to invest these dividends.
Let's look at two buy-rated ASX shares to consider snapping up:
NextDC Ltd (ASX: NXT)
The first option for your Westpac dividends could be NextDC. Morgans thinks that investors should snap up this data centre operator's shares. So much so, it has the company on its best ideas list with an add rating and $19.00 price target. It commented:
NXT should deliver another good set of results in FY24 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT's new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.
Woolworths Group Ltd (ASX: WOW)
If you are on the lookout for defensive options and a source of income, then it could be worth taking a closer look at Woolworths. It is of course one of the big two supermarket operators in Australia.
It could be a good option for those Westpac dividends based on what analysts at Goldman Sachs are saying. They currently have a conviction buy rating and $39.40 price target on its shares. The broker said:
WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.
As for income, Goldman is expecting fully franked dividend yields in the region of 3% through to at least FY 2026.
