These cheap ASX dividend stocks could rise 25% to 40%

Analysts think these stock could generate big returns for income investors.

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Are you on the lookout for some new ASX dividend stocks to buy, then it could be worth checking out what analysts are saying about the two in this article.

That's because brokers have recently named them as top picks for income investors and are forecasting some attractive dividend yields in the near term.

Here's what they are saying about these cheap stocks:

Jumbo Interactive Ltd (ASX: JIN)

The team at Macquarie thinks that Jumbo Interactive could be an ASX dividend stock to buy this month.

It is an online lottery ticket seller best known for its Oz Lotteries app and website. It also offers the Powered by Jumbo platform for lotteries to operate on.

Macquarie believes that its shares are undervalued at current levels. The broker recently said:

Jumbo is trading at a 45% P/E discount to the ASX 300 Industrials, its widest since 2017, following a significant de-rate at the 1H25 result, whereby earnings were impacted by jackpot activity (which will normalise) and market share losses, which if reversed, will be a key re-rating catalyst.

As for income, the broker is forecasting fully franked dividends of 50.5 cents per share in FY 2025 and then 63 cents per share in FY 2026. Based on its current share price of $9.78, this would mean yields of 5.15% and 6.4%, respectively.

Macquarie has an outperform rating and $13.90 price target on its shares. This implies potential upside of 42% over the next 12 months.

Sonic Healthcare Ltd (ASX: SHL)

Another ASX dividend stock that analysts are tipping as a buy is Sonic Healthcare.

Sonic Healthcare is a global healthcare provider specialising in medical diagnostics like pathology and radiology, as well as primary care services.

Bell Potter is bullish on the company and believes that its post-COVID turnaround is gaining traction and that a return to sustainable growth is coming. The broker said:

SHL should return to growth, with c.7.9% / c.9.1% / c.9.7% revenue, EBITDA and Normalised NPAT growth. We expect EBITDA margins to begin to recover in FY25 and deliver c.110bp improvement through to FY27. Growth is being driven by right sizing the business, the impact of acquisitions in FY24 and normalising organic operations post COVID. Our estimates are broadly in line with consensus.

In respect to dividends, the broker is forecasting payouts of 107 cents per share in FY 2025 and then 109 cents per share in FY 2026. Based on its current share price of $27.08, this represents dividend yields of 4% in both years.

Bell Potter also sees plenty of upside on offer here with its buy rating and $33.70 price target. This suggests that its shares could rise almost 25%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Jumbo Interactive and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Jumbo Interactive and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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