If you have room for some ASX 200 dividend shares in your passive income portfolio this week, then the two named below could be worth considering.
Brokers rate these shares very highly and are expecting some good dividend yields from them in the near term. Here's what you need to know about these picks:
Coles Group Ltd (ASX: COL)
Bell Potter thinks that this supermarket giant could be an ASX 200 dividend share to buy. The broker recently put a buy rating and $20.50 price target on its shares.
Its analysts believe that Coles could be a good option for income investors due to its moderating costs, the benefits of higher immigrations, 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 $17.80 this equates to yields of 3.8% and 4.4%, respectively.
Santos Ltd (ASX: STO)
Over at at Ord Minnett, its analysts think that Santos could be an ASX 200 dividend share to buy now. It is of course one of the largest energy producers in Australia.
Ord Minnett currently has a buy rating and $8.50 price target on the company's shares.
The broker rates Santos highly due to its very positive free cash flow (FCF) outlook. Ord Minnett notes that this is being supported by its Pikka and Barossa LNG operations. It explains:
An estimated FCF yield of 20% once Pikka and Barossa LNG start producing, and rigorous control of how that extra cash is spent, implies to us that Santos will have plenty of room to return excess capital to shareholders either via an increased payout ratio or share buybacks. In our view, the medium-term prospects for Santos offer a compelling investment opportunity.
As for dividends, Ord Minnett is forecasting dividends per share of 41 cents in FY 2024 and then 44 cents in FY 2025. Based on the current Santos share price of $6.72 this would mean dividend yields of 6.1% and 6.5%, respectively.
