Most analysts agree that Westpac Banking Corp (ASX: WBC) and the rest of the big four banks are overvalued.
As a result, a great rotation could be on the cards, with investors switching out of the big four and into other areas of the market.
In light of this, income investors might be better off avoiding Westpac and focusing on other ASX dividend shares.
But which ones? Here are a couple that analysts currently rate as buys:
Harvey Norman Holdings Ltd (ASX: HVN)
The team at Bell Potter thinks that retail giant Harvey Norman could be a top ASX dividend share to buy now.
The broker is positive on the company due to its belief that interest rate cuts will give its performance a boost. It explains:
We view HNV's valuation more compelling, particularly given its additional exposure to furniture and land portfolio relative to JBH and WES. In addition, we see the company as a key beneficiary of RBA rate cuts as housing market returns to a more buoyant phase, aided by rising disposable income and house prices during the rate-cutting cycle and that should buoy consumer sentiment. All up, Harvey Norman is well-positioned to benefit from increased spending on big ticket household items such as furniture and electronics.
It expects this to underpin fully franked dividends of 25.4 cents per share in FY 2025 and then 28.1 cents per share in FY 2026. Based on its current share price of $5.65, this would mean dividend yields of 4.5% and 5%, respectively.
Bell Potter has a buy rating and $6.00 price target on its shares.
Treasury Wine Estates Ltd (ASX: TWE)
Treasury Wine could be another ASX dividend share to buy instead of Westpac.
With its shares down materially this year in response to tough trading conditions, the team at Morgans thinks that investors should be snapping them up. It recently said:
A deceleration of US Premium wine sales (particularly 19 Crimes) below US$15 per bottle, has seen TWE revise its FY25 EBITS guidance. The downgrade was minor at 1.3% and better than feared. TWE's Luxury portfolios appear to be performing well. However, focus is now on what impact a change in distributor in TWE's key US market, declining Premium US wine sales and the tariffs will have on FY26. We have revised our forecasts. While not without risk given industry and macro headwinds, TWE's trading multiples look far too cheap (FY25 PE of only 14.2x) and we maintain a BUY rating.
As for income, the broker is forecasting partially franked dividends of 39.5 cents per share in FY 2025 and then 45 cents per share in FY 2026. Based on its current share price of $8.05, this would mean dividend yields of 4.9% and 5.6%, respectively.
Morgans currently has a buy rating and $11.06 price target on its shares.
