While investors tend to turn to ASX growth shares to look for outsized returns, that's not always necessary.
For example, the ASX dividend shares listed below have been tipped by analysts to rise very strongly from current levels while also paying out attractive dividends.
Let's see what is being recommended:
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Accent Group Ltd (ASX: AX1)
Accent Group is a leading footwear retailer in Australia and New Zealand, operating popular brands such as Hype DC, Platypus, and The Athlete's Foot.
The company has a strong track record of profitability and has been growing its store footprint and digital presence. And while it is going through a tough period due to consumer spending pressures, analysts think that it could bounce back strongly now interest rates are falling.
The team at Bell Potter expects this to be the case. This week, the broker put a buy rating and $2.10 price target on its shares. This implies potential upside of approximately 62%.
As for income, it is now forecasting fully franked dividends of 7.4 cents per share in FY 2025 and then 9.5 cents per share in FY 2026. Based on its current share price of $1.30, this equates to dividend yields of 5.7% and 7.3%, respectively.
Rural Funds Group (ASX: RFF)
Another ASX dividend share that could offer big returns is Rural Funds. It is a real estate investment trust (REIT) with a focus on Australian agricultural land.
Rural Funds leases farms to high-quality operators across sectors like cattle, almonds, macadamias, cropping, and vineyards. These long-term lease agreements typically include CPI-linked or market rent reviews, helping to preserve the real value of income over time.
Bell Potter thinks that its shares are dirt cheap at current levels. The broker has a buy rating and $2.45 price target on them, which suggests that upside of 35% is possible from current levels.
In respect to income, the broker is forecasting dividends per share of 11.7 cents in FY 2025 and then 12.2 cents in FY 2026. Based on its current share price of $1.82, this represents dividend yields of 6.4% and 6.7%, respectively.
Fortescue Ltd (ASX: FMG)
Rounding out the list is Fortescue, which is one of the world's largest iron ore producers.
While its dividend can be impacted by fluctuations in commodity prices, Fortescue has consistently returned significant capital to shareholders through generous payouts.
Morgans expects this to remain the case in the near term. It is forecasting fully franked dividends per share of $1.08 in FY 2025 and then $1.15 in FY 2026. Based on its current share price of $15.00, this would mean dividend yields of 7.2% and 7.7%, respectively.
The broker has a buy rating and $18.80 price target on its shares. This implies potential upside of 25% for investors.
