Are you on the lookout for some new additions to your income portfolio?
If you are, then the two ASX dividend shares listed below could be worth considering. Here's why analysts are tipping them as buys:
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BHP Group Ltd (ASX: BHP)
Analysts at Goldman Sachs think that mining giant BHP could be a quality option for income investors. The broker believes the company's shares are good value despite their premium valuation. It said:
BHP is currently trading at ~6.0x NTM EBITDA (25-yr average EV/EBITDA of 6.6x), a slight premium to RIO on ~5.5x; and at 0.9xNAV vs RIO at 0.8xNAV. Over the last 10 years, BHP has traded at a ~0.5x premium to global mining peers. We believe this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers).
Goldman currently has a buy rating and $48.40 price target on the Big Australian's shares. Based on its current share price of $41.76, this implies potential upside of 16% for investors over the next 12 months.
As for dividends, the broker is forecasting fully franked dividends per share of US$1.42 (A$2.12) in FY 2024 and then US$1.23 (A$1.83) in FY 2025. This equates to dividend yields of 5.1% and 4.4%, respectively.
Dexus Industria REIT (ASX: DXI)
Another ASX dividend share that could be a great option for income investors is Dexus Industria. It is a real estate investment trust with a focus on industrial warehouses.
Morgans is tipping its shares as a top buy. This is due to its belief that the company is well-placed to benefit from strong demand for industrial property and its development pipeline. It said:
The portfolio is valued at $1.6bn across +90 properties with 89% of the portfolio weighted towards industrial assets (WACR 5.38%). The portfolio's WALE is around 6 years and occupancy 97.5%. Across the portfolio 50% of leases are linked to CPI with the balance on fixed increases between 3-3.5%. While we expect cap rates to expand further in the near term, DXI's industrial portfolio remains robust with the outlook positive for rental growth. The development pipeline also provides near and medium-term upside potential and post asset sales there is balance sheet capacity to execute.
Morgans has an add rating and $3.20 price target on its shares. Based on its current share price of $2.88, this suggests that upside of 11% is possible for investors.
In respect to income, the broker is forecasting dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. This will mean dividend yields of 5.7% and 5.75%, respectively.
