The Australian share market traditionally has an average dividend yield of approximately 4%.
But you don't have to settle for that!
Not when there are buy-rated ASX dividend shares like the two listed below. Here's what you need to know about them:
Woodside Energy Group Ltd (ASX: WDS)
Morgans continues to think that income investors should buy energy giant Woodside's shares.
The broker has an add rating and $33.00 price target on its shares. Based on its current share price of $24.00, this implies potential upside of 38% over the next 12 months.
Morgans thinks that Woodside's shares are undervalued. It said:
A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS's share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.
As for dividends, the broker is forecasting fully franked dividends of $1.83 per share in FY 2024 and $1.52 per share in FY 2025. Based on its current share price, this will mean dividend yields of 7.6% and then 6.3%.
Healthco Healthcare and Wellness REIT (ASX: HCW)
Another high-yield ASX dividend share that could be a buy is HealthCo Healthcare & Wellness REIT.
It is a real estate investment trust that invests in hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness property assets.
Bell Potter has a buy rating and $1.50 price target on its shares. This suggests that upside of 34% is possible for investors.
The broker thinks that its shares are undervalued and could provide big returns for investors. It said:
With +5% earnings growth expected for FY25, we see value in HCW at current levels with the buyback putting a floor under the share price and HCW continuing to deliver from a property perspective. At a +7% DPS yield and meaningful discount to NTA, HCW screens attractively on a sector-relative basis.
In respect to income, the broker is forecasting dividends of 8.4 cents per share for FY 2025 and then 8.7 cents per share in FY 2026. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.12, this will mean dividend yields of 7.5% and 7.8%, respectively.
