Fortunately for income investors, there are plenty of ASX 200 dividend shares to choose from on the local share market.
Two that have recently named as buys are listed below. Let's see why brokers are feeling bullish about these names right now:
Coles Group Ltd (ASX: COL)
The team at Bell Potter recently initiated coverage on this supermarket giant's shares.
According to the note, the broker thinks that Coles could be an ASX 200 dividend share to snap up right now. It put a buy rating and $20.50 price target on its shares.
Bell Potter believes that Coles would be a good option due to moderating costs, higher immigration, and the modernisation of its supply chain. It explains:
Coles Group is a diversified company with operations in food, liquor, petrol retailing and financial services. Coles also retains a 50% ownership interest in Flybuys. Costs are expected to remain elevated but should moderate through FY24 and FY25 as general inflation tapers off. In the medium term, 1) higher immigration should support grocery spending, and 2) Coles is entering a period of elevated capex intensity as it reinvests to modernise its supply chain and to catch up to competitors on online and digital offerings, which should help Coles maintain its market position.
As for income, the broker is forecasting fully franked dividends per share of 68 cents in FY 2025 and then 78 cents in FY 2026. Based on its current share price of $17.52, this equates to yields of 3.9% and 4.5%, respectively.
Telstra Group Ltd (ASX: TLS)
Another ASX 200 dividend share that has been named as a buy is telco giant Telstra.
Analysts at Goldman Sachs are feeling bullish about the company's outlook thanks to its key mobile business. It also sees opportunities for the company to unlock value from asset divestments.
As a result, the broker has put a buy rating and $4.35 price target on its shares. It said:
We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn.
In respect to dividends, Goldman is forecasting fully franked dividends of 19 cents per share in FY 2025 and then 20 cents per share in FY 2026. Based on the current Telstra share price of $3.88, this represents dividend yields of 4.9% and 5.15%, respectively.
