There are a lot of options for Australian income investors to choose from.
To narrow things down, let's take a look at a couple of ASX dividend stocks that have recently been named as buys by analysts at Goldman Sachs.
Here's what the broker is recommending as buys:
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Qantas Airways Ltd (ASX: QAN)
It has been a while since this airline operator could be classed as an ASX dividend stock. But thanks to a significant transformation since the COVID-19 pandemic, Qantas is now paying dividends again.
And although the Flying Kangaroo's shares have been on fire over the past 12 months, Goldman Sachs doesn't believe it is too late to invest. It said:
Valuation is still attractive in our view. We believe that QAN's earnings capacity has sustainably improved since COVID, which provides a solid foundation for QAN's next stage of growth. The 1H25 results/ FY25 guide also reflected early upside associated with initial deliveries from QAN's fleet renewal program.
As for income, the broker is forecasting dividends per share of 43 cents per share in FY 2025 and then 33 cents per share in FY 2026 and FY 2027. Based on the current share price of $9.35, this equates to dividend yields of 4.6% and 3.5%, respectively.
Goldman Sachs has a buy rating and $11.80 price target on the company's shares.
Steadfast Group Ltd (ASX: SDF)
Another ASX dividend stock that Goldman Sachs rates as a buy is Steadfast. It is a group of insurance brokers providing commercial insurance solutions for SME clients. The company also operates the SDF network of brokers.
Goldman likes the company due to its strong position in the market, as well as the favourable operating environment. It explains:
We like SDF because of the industry structure favouring insurance brokers. 1) Premium rate environment remains supportive of organic growth trends (albeit moderating); 2) Little to no exposure to underwriting risk with revenues largely dependent on premiums written; 3) An opportunity to acquire EPS accretively with unlisted acquisitions at multiples accretive to earnings (including offshore); 4) A defensive business model which is relatively resilient to economic activity; 5) Valuation appeal compared to global peers.
The broker is forecasting fully franked dividends per share of 20 cents in FY 2025 and then 22 cents in FY 2026. Based on its current share price of $5.77, this equates to dividend yields of 3.5% and 3.8%, respectively.
Goldman Sachs has a buy rating and $6.50 price target on its shares.
