There are a lot of ASX blue chip shares to choose from on the Australian share market. But which ones could be top options for passive income?
Listed below are two that analysts think could be in the buy zone right now. They are as follows:
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Endeavour Group Ltd (ASX: EDV)
Analysts at Goldman Sachs think that Endeavour Group could be an ASX blue chip share to buy this month.
It is the owner of Australia's largest retail drinks network under the Dan Murphy's and BWS brands. It also runs the country's largest portfolio of licensed hotels.
Goldman Sachs thinks the company would be a great option for passive income investors due to the quality of its operations and potential for further market share gains. It said:
We reiterate Buy on our continued believe in a high quality retailer gaining share amid a category down-cycle with a resilient growth option in Hotels. Company is trading at FY25 P/E of 17x vs historical average of 22x and WOW 22x, COL 21x. Next catalyst: post Xmas trading at 1H25 results.
In respect to dividends, the broker is forecasting fully franked dividends of 20 cents per share in FY 2025 and 22 cents per share in FY 2026. At the current share price of $4.28, this equates to dividend yields of 4.7% and 5.1%, respectively.
Goldman currently has a buy rating and $5.50 price target on its shares.
Telstra Group Ltd (ASX: TLS)
Bell Potter thinks that Telstra could be an ASX blue chip share to buy for passive income.
Telstra is of course Australia's leading telecommunications and information services company with 22.5 million retail mobile services and 3.4 million retail bundle and data services.
The broker believes that its shares are good value at current levels, especially given its attractive (and growing) dividend yield. It said:
We believe the stock looks reasonable value on an FY25 PE ratio of c.20x when all of the comps in the S&P/ASX 20 trade on >20x. We also believe the forecast fully franked yield of 4.8% [now 4.7%] is attractive when CBA's forecast yield is now <4%. The yield is comparable, however, to the other banks but Telstra's dividend is expected to grow whereas the banks are not so much.
As for income, 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 $4.06, this represents dividend yields of 4.7% and 5%, respectively.
The broker has a buy rating and $4.35 price target on Telstra's shares.
