Income investors that are looking for some new picks might want to check out the two ASX dividend stocks in this article.
They have recently been named as top picks by analysts and are tipped to provide good dividend yields. Here's what they are saying about them:
Eagers Automotive Ltd (ASX: APE)
Bell Potter thinks that Eagers Automotive could be an ASX dividend stock to buy.
It recently named the automotive retailer on its Australian equities panel. These are shares that it believes offer attractive risk-adjusted returns over the long term.
Commenting on the company, Bell Potter 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%). The company is also in a strong financial position with core net debt of around $495m and a property portfolio worth around $727m as at 30 June 2024.
As for dividends, the broker is forecasting fully franked dividends of 66.5 cents in FY 2024 and then 73 cents in FY 2025. Based on the current share price of $11.95, this will mean dividend yields of 5.5% and 6.1%, respectively.
Bell Potter has a buy rating and $13.00 price target on its shares.
QBE Insurance Group Ltd (ASX: QBE)
Goldman Sachs thinks that insurance giant QBE could be an ASX dividend stock to buy.
The broker recently named five reasons why the company could be a top pick for investors right now. It said:
We are Buy-rated on QBE because 1) QBE underlying trends look positive, 2) QBE's achieved rate increases continue to be ahead of loss cost inflation and rate adequate, 3) North America is on a pathway to improved profitability, 4) Valuation is not demanding at 10x and attractive v historical average of ~13x, 5) Strong ROE.
In respect to income, Goldman is forecasting dividends per share of 53 US cents (85.1 Australian cents) in FY 2025 and 56 US cents (90 Australian cents) in FY 2026. Based on the current QBE share price of $19.53, this equates to dividend yields of 4.4% and 4.6%, respectively.
The broker has a buy rating and $22.50 price target on its shares.
