Income investors are spoilt for choice on the Australian share market.
But which of the many ASX dividend shares out there could be buys for them right now?
Let's take a look at two that brokers have recently recommended to their clients. They are as follows:
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Coles Group Ltd (ASX: COL)
The first ASX dividend share that could be a buy according to brokers is Coles.
It is of course one of the big two supermarket operators in Australia. It also owns the Liquorland brand, as well as a stake in Flybuys.
Macquarie is a big fan of the company and named it as one of its top consumer picks this month. It explains:
Despite concerns around market share losses in some categories (e.g., Aldi, Chemist Warehouse and Bunnings), we are attracted to the earnings growth driven by supply chain benefits. As a result, we expect earnings to grow ahead of sales, with opportunities to re-gain some share from strong CFC [Customer Fulfilment Centres] performance.
According to the note, the broker has an outperform rating and $24.10 price target on its shares. This implies potential upside of almost 15% for investors.
As for income, the broker is forecasting fully franked dividends of 67 cents per share in FY 2025 and then 78 cents per share in FY 2026. Based on its current share price of $21.02, this would mean dividend yields of 3.2% and 3.7%, respectively.
Perpetual Ltd (ASX: PPT)
Bell Potter thinks that financial services company Perpetual could be an ASX dividend share to buy.
This is due partly to its belief that its transformation will start to bear fruits soon. It said:
Over the last few years PPT has taken heavy significant charges relating to the acquisition and integration (of Pendal, Barrow Hanley and Trillium), as well as the subsequent Strategic Review, separation program and Simplification Program. With the sale of WM, we anticipate that these charges will start to abate and that UPAT, will converge closer to NPAT and underlying cash generation.
The broker has a buy rating and $23.00 price target on its shares. This suggests that upside of approximately 9% is possible from current levels.
In addition, the broker is forecasting a 5.9% dividend yield in FY 2025 and then a 6.7% dividend yield in FY 2026. Bell Potter adds:
We anticipate that the sale of the Wealth Management business will free resource within the company, reducing net debt, and lower interest costs which in turn should free cashflow for dividends and reinvestment in the business. Our Adjusted EPS forecast decreases by 2.2% for FY25, increases by 0.5% for FY26, and 2.3% for FY27. We move our Target Price to $23.00/sh and maintain our BUY recommendation.
