Income investors have lots of options when it comes to ASX dividend shares. So much so, it can be hard to decide which ones to buy above others.
But don't worry, because analysts at Bell Potter have been busy doing the hard work for you and have picked out a couple of stocks that they think are top buys. Here's why they are bullish on them:
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Rural Funds Group (ASX: RFF)
Rural Funds could be a quality ASX dividend stock to buy now according to analysts at Bell Potter.
It is an agricultural property company that owns a portfolio of assets across a range of industries. This includes orchards, vineyards, water entitlements, cropping, and cattle farms. These properties are leased to large industry players on long term agreements.
As a result, Rural Funds currently boasts a weighted average lease expiry (WALE) of 13.5 years across its 67 properties.
Bell Potter thinks its shares are undervalued at present and expects attractive dividend yields in the near term It said:
RFF trades at a historical high discount to its market NAV per unit ($2.78 pu) at ~28%. While we are in general seeing large discounts to NAV in ASX listed farming and water assets to market NAV, the discount that RFF is trading appears excessive and we are seeing a valuable opportunity in RFF. While the timing of that value discount closing is difficult to call, investors are likely to be rewarded with a ~6% yield to hold the position until such a time as the asset class rerates. Furthermore, RFF aims to achieve income growth through productivity improvements, conversion of assets to higher and better use along with rental indexation which is built into all of its contracts with its tenants.
As for those dividend yields, the broker is forecasting dividends per share of 11.7 cents in FY 2025 and 12.2 cents in FY 2026. Based on the current Rural Funds share price of $1.98, this will mean yields of 5.9% and 6.2%, respectively.
Bell Potter has a buy rating and $2.50 price target on its shares.
SRG Global Ltd (ASX: SRG)
Another ASX dividend stock that Bell Potter is bullish on is SRG Global. It is a diversified industrial services group that provides multidisciplinary construction, maintenance, production drilling and geotechnical services.
Bell Potter has named the company on its favoured list this month. This is because it believes that SRG Global will be a beneficiary of Government-stimulated construction activity and accelerating growth in iron ore and gold production volumes over the next five years. The broker expects this to underpin some good (and growing) dividend yields. 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 long-term. We anticipate Mining Services will be a beneficiary of accelerating growth in iron ore and gold production volumes over the next five years.
In respect to those dividends, the broker is forecasting fully franked dividends of 5 cents in FY 2025 and then 6 cents in FY 2026. Based on its current share price of $1.06, this will mean dividend yields of 4.7% and 5.7%, respectively.
Bell Potter has a buy rating and $1.40 price target on its shares.
