Australian dividend machines: 3 ASX shares that generate reliable passive income

Analysts think these income stocks are in the buy zone.

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The Australian share market is a great place to generate passive income.

However, if you want a reliable source of income, you will need to choose your ASX shares carefully.

After all, failure to do so could mean you end up with far less income one year than you were relying on.

With that in mind, let's take a look at three ASX shares that could be worth considering as part of a balanced income portfolio. They are as follows:

APA Group (ASX: APA)

The first ASX share to look at for passive income is APA Group. It is an energy infrastructure business that owns, manages, and operates a diverse portfolio of gas, electricity, solar and wind assets.

These assets generate a reliable and growing source of income for the company each year. So much so, it is on course to increase its dividend for 20 years in a row.

Analysts at Macquarie believe the company will achieve this. The broker is forecasting APA Group to increase its dividend to 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $7.90, this equates to 7.1% and 7.3% dividend yields, respectively.

Macquarie has an outperform rating and $9.40 price target on the company's shares.

Coles Group Ltd (ASX: COL)

Another ASX share that could offer a reliable source of passive income is supermarket giant Coles.

Given the company's strong pricing power, defensive earnings, market leadership position, and favourable dividend policy, it appears well-positioned to continue paying attractive dividends long into the future.

Morgans thinks this will be the case. Its analysts are forecasting Coles to pay fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $17.03, this implies yields of approximately 3.9% and 4.1%, respectively.

Morgans has an add rating and $18.95 price target on its shares.

Suncorp Group Ltd (ASX: SUN)

Finally, Suncorp could be another good option for passive income. It is the insurance company behind brands including AAMI, Apia, Bingle, GIO, Shannons, and Vero, as well as the eponymous Suncorp brand.

Goldman Sachs is positive on the company. It believes some attractive dividend yields are coming for buyers at current levels.

The broker is forecasting fully franked dividends per share of 78 cents in FY 2024 and then 83 cents in FY 2025. Based on the current Suncorp share price of $16.68, this will mean dividend yields of 4.7% and 5%, respectively.

Goldman Sachs has a buy rating and $17.54 price target on its shares.

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 positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group, Coles Group, and Macquarie Group. 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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