Last week, I pressed the sell button on Westpac Banking Corp (ASX: WBC) on the belief that its shares (and the rest of the big four banks) had peaked and could underperform in the coming years.
This has proven to be very fortunate timing, with Australia's oldest bank's shares losing 10% of their value this week.
But despite this pullback, I wouldn't be in a hurry to re-invest in Westpac or the big four banks if I were an income investor.
Instead, I would focus on ASX dividend stocks outside the banking sector, such as the two listed below that brokers are tipping as buys. Here's what you need to know about them:
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Accent Group Ltd (ASX: AX1)
The first ASX dividend stock to consider instead of the big four banks is Accent Group. It is a leading retailer in the Australian footwear market, commanding approximately 30% of the $3 billion Australian footwear retailing market.
Bell Potter is a fan of the retailer and its analysts have named it as "a key pick in our retail sector coverage given their scale as Australia's market leader, growth adjacencies in both footwear/apparel from exclusive partnerships & TAF channel conversion, and growing vertical brand strategy led by Nude Lucy."
As for income, the broker is forecasting fully franked payouts of 13.7 cents per share in FY 2025 and 15.6 cents per share in FY 2026. Based on its latest share price of $2.11, this equates to dividend yields of 6.5% and 7.4%, respectively.
Bell Potter has a buy rating and $2.75 price target on Accent's shares.
Elders Ltd (ASX: ELD)
Another ASX dividend stock to consider ahead of the big four banks is Elders. It is a leading Australian agribusiness company that provides specialist knowledge and tailored advice across a broad range of agricultural products and services.
Bell Potter is bullish on the company, highlighting that its shares are undervalued based on long-term average multiples. It notes that Elders is currently trading at around 7.4 times its projected FY 2025 EBITDA, representing a discount to its long-term average multiple of 8.5 times.
Another positive is that the broker is expecting some good yields from its shares in the near term. It is forecasting fully franked dividends of 41 cents per share in FY 2025 and 43 cents per share in FY 2026. Based on the current Elders share price of $7.22, this equates to dividend yields of 5.7% and 6%, respectively.
Bell Potter currently has a buy rating and $9.45 price target on its shares.
