There are a lot of ASX dividend shares for investors to choose from on the Australian share market.
The good news is that brokers have narrowed things down by picking out a number that they think are buys. Here are a couple that have been given the thumbs up:
BHP Group Ltd (ASX: BHP)
Goldman Sachs thinks that mining giant BHP could be an ASX dividend share to buy now.
The broker believes copper is going to become very important to BHP's earnings in the coming years as it looks to grow its production at a time of supply side challenges. It recently said:
We remain bullish on copper due to ongoing supply side challenges and increasing demand, and expect BHP's copper EBITDA to increase by ~US$5bn to ~US$13bn by FY26 (~45% of group EBITDA). Under our base case, copper EBITDA is expected to reach ~US$17bn by FY35, at GSe long run copper of ~US$4.6/lb (real $, from 2028).
In respect to income, Goldman Sachs is forecasting fully franked dividends per share of approximately ~A$1.56 in FY 2025 and then ~A$1.45 in FY 2026. Based on the current BHP share price of $39.05, this would mean dividend yields of 4% and 3.7%, respectively.
Goldman Sachs currently has a buy rating and $45.10 price target on its shares.
Steadfast Group Ltd (ASX: SDF)
The team at Macquarie thinks that Steadfast could be an ASX dividend share to buy this month. It is a group of insurance brokers providing commercial insurance solutions for SME clients. It also operates the SDF network of brokers.
Macquarie believes that the company's shares are undervalued based on international peer multiples. And as it grows its international earnings, it feels that its shares should re-rate towards these higher multiples. The broker said:
SDF currently holds assets internationally in New Zealand, Asia, London (HWS), Europe (UnisonSteadfast), and the US (ISU Steadfast). These offshore investments contribute ~7.5% to the Group's earnings. We expect SDF to provide separate financial disclosures for these interests as the contribution approaches ~15% of Group earnings.
SDF trades at a ~24.6% discount to international peers on a 2-year forward PE basis (compared with the ~2.4% long-term premium) hence our Outperform recommendation.
The broker is expecting this to support fully franked dividends per share of 20 cents in FY 2025 and then 21 cents in FY 2026. Based on its current share price of $5.93, this equates to dividend yields of 3.4% and 3.55%, respectively.
The broker has an outperform rating and $6.80 price target on Streadfast's shares.
