While Commonwealth Bank of Australia (ASX: CBA) has been a great share to own over the past 12 months, it isn't a very tempting option for income investors now.
As well as being labelled as overvalued by analysts, the consensus estimate is that Australia's largest bank will pay a fully franked $4.73 per share dividend in FY 2025.
Based on its current share price of $156.05, this equates to a dividend yield of just 3%.
You can find better yields on the bank's term deposits.
In light of this, income investors may want to look at other ASX dividend stocks for their portfolio this year. Two that analysts rate as buys are as follows:
Telstra Group Ltd (ASX: TLS)
Bell Potter thinks that Telstra could be an ASX dividend stock to buy instead of CBA It 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.
Commenting on why it thinks it would be a better option, the broker 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.
Bell Potter 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 $4.04, 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.
Harvey Norman Holdings Limited (ASX: HVN)
Bell Potter also sees retail giant Harvey Norman as a top ASX dividend stock to buy now.
Particularly given its belief that the company will benefit from an artificial intelligence driven major upgrade/replacement cycle of devices purchased during the COVID-19 pandemic.
It expects this to support fully franked dividends of 25.9 cents per share in FY 2025 and then 28.5 cents per share in FY 2026. Based on the current Harvey Norman share price of $4.71, this equates to attractive 5.5% and 6% dividend yields, respectively.
Bell Potter has a buy rating and $5.80 price target on its shares.
