Income investors have a lot of options on the Australian share market. But which ASX dividend shares do analysts currently think are buys?
Let's take a look at two shares that they have been tipping as great picks for investors today. They are as follows:
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Santos Ltd (ASX: STO)
Ord Minnett continues to believe that Santos would be a great ASX dividend share to buy. It is one of the largest energy producers in Australia with a collection of world class operations and projects.
It highlights Santos' positive free cash flow (FCF) outlook as a reason to buy its shares. The broker notes that this is being supported by its Pikka and Barossa LNG operations.
Importantly for income investors, Ord Minnett believes this leaves Santos well-placed to return funds to shareholders. The broker said:
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.
For now, the broker 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 $6.92, this would mean dividend yields of 5.9% and 6.35%, respectively.
Ord Minnett currently has a buy rating and $8.40 price target on the company's shares. This implies potential upside of 21% for investors.
Universal Store Holdings Ltd (ASX: UNI)
Another ASX dividend share that could be a great option for income investors is Universal Store. It is the youth fashion retailer behind Thrills, Perfect Stranger, and the eponymous Universal Store brand.
Morgans has been impressed with the company's performance so far in FY 2025. It recently said:
At its AGM, UNI provided a trading update for the first 17 weeks of FY25 with total direct to consumer (DTC) sales up by an impressive 19.3% on the pcp. LFL sales in Universal Store and Perfect Stranger accelerated in the last 10 weeks from the first 7 weeks, whilst sales moderated in CTC THRILLS DTC business and wholesale demand (ex-Universal Store) remains volatile. Gross margins have been well managed, in our view, and improvements made in 2H24 have continued into FY25 driven by mix (increased private label penetration).
In light of this, the broker is now forecasting dividends per share of 34 cents in FY 2025 and then 38 cents in FY 2026. Based on the current Universal Store share price of $7.44, this would mean dividend yields of 4.6% and 5.1%, respectively.
Morgans currently has an add rating and $8.75 price target on its shares. This suggests the upside of 18% is possible from current levels.
