There are a lot of ASX dividend stocks to choose from on the Australian share market, but which ones could be smart buys right now?
Let's take a look at two that analysts think could be among the smartest ASX dividend stocks to buy now with $5,000. Here's what you need to know about them:
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Harvey Norman Holdings Limited (ASX: HVN)
Bell Potter thinks that Harvey Norman could be a smart buy for income investors. It is one of Australia's largest household and consumer goods retailers with stores across the country and overseas.
The broker thinks that its valuation is attractive. Particularly given its property division and exposure to the AI driven upgrade cycle. It explains:
We see HVN trading attractively at ~15x on a 1-year forward basis with multiple catalysts near/midterm such as improving sales trends in key markets assisted by a sizable upside from the AI driven upgrade cycle/replacement & spend shift to tech, gaining penetration in targeted regions in the UK in addition to the incremental earnings opportunities in its Property division as Australia's largest single owner with a $4.4b global portfolio.
In respect to income, the broker is forecasting fully franked dividends of 25.4 cents per share in FY 2025 and then 28.1 cents per share in FY 2026. Based on the current Harvey Norman share price of $5.27, this will mean dividend yields of 4.8% and 5.3%, respectively.
Bell Potter currently has a buy rating and $6.00 price target on its shares.
Telstra Group Ltd (ASX: TLS)
Another ASX dividend stock that could be a smart buy this week is Telstra. It is Australia's largest telco operator providing around 22.5 million retail mobile services and 3.4 million retail bundle and data services.
The team at Macquarie thinks it is among the smartest buys right now. Especially following the recent announcement of its Connected Future 30 strategy, which it believes will be a big positive. It explains:
Underlying ROIC expansion to 10% by FY30, driven by operating leverage. MSD cash EPS CAGR to FY30, with multiple cost-out options. Scope for further capital mgmt. Improving EPS profile and strong cash generation drives scope for growing dividend and/or buybacks. Network as a Product (NaaP) supports sales growth. Improving value proposition supports ARPU increases through mix, price & new revenue.
As for dividends, the broker is forecasting fully franked payouts of 19.9 cents per share in FY 2025 and then 22 cents per share in FY 2026. Based on its current share price of $4.81, this would mean dividend yields of 4.1% and 4.6%, respectively.
Macquarie currently has an outperform rating and $5.28 price target on its shares.
