The Australian share market typically offers investors an attractive 4% dividend yield.
But retirees don't have to settle for that. Not when there are high-yield ASX dividend shares out there offering significantly more.
Let's take a look at two dividend shares with generous yields that analysts are tipping as buys:
HomeCo Daily Needs REIT (ASX: HDN)
The first ASX dividend share for retirees to consider buying is HomeCo Daily Needs.
It is an Australian property company with a mandate to invest in convenience-based assets across the target sub-sectors of neighbourhood retail, large format retail, and health and services.
At present, it has 51 properties, a 99% occupancy rate, and tenants such as Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES), and Woolworths Group Ltd (ASX: WOW).
Morgans is a fan of the company and believes it is positioned for growth. It commented:
The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support 'last mile logistics'. Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.
As for dividends, the broker is forecasting dividends per share of 8.5 cents in FY 2025 and then 8.7 cents in FY 2026. Based on the current HomeCo Daily Needs share price of $1.18, this will mean dividend yields of 7.2% and 7.4%, respectively.
Morgans currently has an add rating and $1.36 price target on its shares.
Smartgroup Corporation Ltd (ASX: SIQ)
Another high-yield ASX dividend share for retirees to consider buying this week is Smartgroup.
It is an industry-leading provider of employee benefits, end-to-end fleet management, and software solutions. At the last count, it had over 400,000 salary packages and 64,000 novated leases under management.
The team at Bell Potter is positive on the company and believes its shares are undervalued. Particularly given the company's defensive qualities and favourable tailwinds. It said:
Our favourable investment view is predicated on: (1) defensive customer segments with strong forecast occupational growth within the disability and aged care services; (2) the Electric Car Discount Bill (2022) which exempts new energy vehicles from Fringe Benefits Tax; and (3) a greater availability and selection of new energy vehicles, particularly in the mid-to-large Sports Utility segment.
In respect to dividends, the broker is forecasting fully franked dividends of 59.7 cents in FY 2025 and then 62.7 cents in FY 2026. Based on its current share price of $7.74, this will mean big dividend yields of 7.7% and 8.1%, respectively.
Bell Potter currently has a buy rating and $10.00 price target on its shares.
