Thankfully for income-seeking investors, there are plenty of options for them to choose from on the local market.
But which could be best buys?
Two ASX income stocks that feature on best idea lists for brokers are named below. Here's why they are bullish on them:
Image source: Getty Images
Clearview Wealth Ltd (ASX: CVW)
Morgans think that this financial services company could be a quality ASX income stock to buy.
The broker believes Clearview trades on undemanding multiples. This is despite its belief that the company is on course to deliver strong earnings growth in the coming years. It said:
CVW is a challenger brand in the Australian retail life insurance market (market size = ~A$10bn of in-force premiums). CVW sees its key points of differentiation as its: 1) reliable/trusted brand; 2) operational excellence (in product development, underwriting and claims management); and 3) diversified distributing network. CVW's significant multiyear Business Transformation Program has, in our view, shown clear signs of driving improved growth and profitability in recent years. We expect further benefits to flow from this program in the near term, and we see CVW's FY26 key business targets as achievable. With a robust balance sheet, and with our expectations for ~21% EPS CAGR over the next three years, we see CVW's current ~11x FY25F PE multiple as undemanding.
As for income, the broker is forecasting fully franked dividends of 2.9 cents per share in FY 2024 and 3.5 cents per share in FY 2025. Based on the current Clearview share price of 60 cents, this would mean dividend yields of 4.8% and 5.8%, respectively.
Morgans has an add rating and 78 cents price target on its shares.
SRG Global Ltd (ASX: SRG)
Bell Potter thinks that SRG Global could be a top ASX income stock to buy. It is a diversified industrial services group that provides multidisciplinary construction, maintenance, production drilling and geotechnical services.
Bell Potter is feeling positive about the company's short and medium term outlook. It also feels that its shares trade on undemanding multiples. It explains:
SRG's short-to-medium term outlook is reinforced by Government stimulated construction activity in the infrastructure and non-residential sectors and increased development and sustaining capital expenditures in the resources industry. The resulting expansion in infrastructure bases across these sectors will likely support increased demand for asset care and maintenance in the medium to longterm. We anticipate Mining Services will be a beneficiary of growth in iron ore and gold production over the next five years. SRG's valuation multiples are undemanding, we see potential for a rerate higher towards the Industrial Services peer group average.
The broker is expecting this to underpin fully franked dividends of 4.7 cents in FY 2024 and then 5.6 cents in FY 2025. Based on its current share price of 87.5 cents, this will mean dividend yields of 5.4% and 6.4%, respectively.
Bell Potter has a buy rating and $1.35 price target on its shares.
