Are you on the hunt for new additions to your income portfolio?
If you are, then it could pay to listen to what analysts are saying about the two ASX 200 dividend shares in this article.
They have recently been named as buys by analysts and tipped to offer attractive dividend yields and major upside potential. Here's what they are saying:
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BHP Group Ltd (ASX: BHP)
Analysts at Goldman Sachs continue to believe that mining giant BHP could be an ASX 200 dividend share to buy.
BHP is of course one of the world's largest miners with operations across a range of commodities, including iron ore, potash, nickel, and copper.
Goldman Sachs likes the miner due to its growing exposure to copper. It explains:
We remain bullish on copper due to ongoing supply side challenges and increasing demand and expect BHP's copper EBITDA to increase by ~US$3bn to ~US$10bn by FY26E (~45% of group EBITDA). Under our base case, copper EBITDA is expected to reach US$14bn by FY35E and ~US$19bn with all copper growth, at GSe long run copper of US$4.44/lb (real $, from 2028).
The broker believes this will support the payment of fully franked dividends of 99 US cents (A$1.59) per share in FY 2025 and US$1.08 (A$1.73) per share in FY 2026. Based on the current BHP share price of $39.84, this equates to dividend yields of 4% and 4.3%, respectively.
Goldman has a buy rating and $47.40 price target on BHP's shares. This suggests that upside of almost 20% is possible for investors from current levels.
Smartgroup Corporation Ltd (ASX: SIQ)
Another ASX 200 dividend share that analysts are tipping as a buy is Smartgroup.
It is a leading employee benefits, end-to-end fleet management, and software solutions provider.
Bell Potter is feeling very bullish about Smartgroup and feels that its shares are being seriously undervalued by the market. Commenting on its buy rating, the broker 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.
As for income, 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 $7.70, this means big potential dividend yields of 7.75% and 8.15%, respectively.
Bell Potter has a buy rating and $10.00 price target on its shares. This implies potential upside of 30% for investors.
