If you are looking for ASX dividend stocks to buy, then it could be worth listening to what Bell Potter is saying about the three in this article.
They have been named on the broker's Australian equities panel for December, which are the stocks it believes offer attractive risk-adjusted returns over the long term. Here's what it is saying:
Eagers Automotive Ltd (ASX: APE)
The first ASX dividend stock that has been named on the broker's Australian equities panel is Eagers Automotive.
It is the leading player in the automotive retail market in Australia, with a market share of greater than 10%.
Bell Potter believes that it is well-positioned to pay big dividends thanks to a combination of revenue growth and margin expansion. It said:
APE should continue to grow revenue via a mix of inorganic and organic growth. The company is also looking to drive margin expansion by buying existing dealership properties (to reduce rent), increasing penetration in finance and insurance (F&I) (higher margin) and through productivity initiatives (technology). Together, management are expecting ~200bps of margin improvement from these initiatives, which would be extremely material (pre-COVID margins of 2.9%).
Bell Potter expects a fully franked 5.8% dividend yield in FY 2025.
JB Hi-Fi Ltd (ASX: JBH)
Another ASX dividend stock that could be a buy according to Bell Potter is retail giant JB Hi-Fi.
The broker believes that JB Hi-Fi could be a big winner from the artificial intelligence (AI) boom. It said:
JBH is well positioned to benefit from an upgrade cycle of consumer electronics, specifically mobile phones and personal computers (PC), driven by AI enhancements. We see incremental revenue growth to JBH from the AI-driven upgrade cycle, where we estimate that the AI opportunity could add up to ~12% to the company's topline mid-long-term and presents significant upside to JBH's highly efficient earnings base.
Its analysts expect this to underpin a fully franked 2.9% dividend yield in FY 2025.
Universal Store Holdings Ltd (ASX: UNI)
Bell Potter also has this youth fashion retailer's shares on its Australian equities panel this month.
The broker likes Universal Store due to its attractive valuation and positive growth outlook. It explains:
Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 12% p.a. over (FY25-27). Valuation looks attractive, trading on a fwd P/E of ~14x. UNI is a quality small cap (ROE ~25%) that is executing on its rollout strategy.
Bell Potter is forecasting a fully franked 3.9% dividend yield in FY 2025.
