ASX dividend shares can be a great source of returns because they deliver both passive income and capital growth. Experts have made compelling predictions for two S&P/ASX 300 Index (ASX: XKO) shares that could mean good medium-term returns.
The lesser-known businesses are just as capable of producing a 10% return as the most well-known blue chips or ASX shares.
The broker UBS has rated both of the companies that I'm about to cover as buys. Let's examine their potential for passive income.
Collins Foods Ltd (ASX: CKF)
Collins Foods is a franchisee business that operates KFC restaurants in Australia, the Netherlands, and Germany. The company has experienced difficulty during the high cost-of-living period as its expenses have increased and customer demand has suffered.
UBS rates it as a buy with a price target of $9.75.
The recent FY25 result's net profit after tax (NPAT) was 22% better than what UBS was expecting. That was because the European business held up "materially better than feared" and the Australian KFC operating profit (EBITDA) margin in the second half of FY25 was stronger than expected thanks to cost deflation (chicken and potatoes) and the start of productivity improvements. Those tailwinds only flowed through in the fourth quarter of FY25, so there could be further improvements in FY26.
UBS is currently forecasting 14% net profit growth in FY26 for the ASX dividend share, though UBS thinks it could do better than that if those improvements continue, interest rate cuts boost demand, and other benefits. The broker is predicting that earnings per share (EPS) could rise at a compound annual growth rate (CAGR) of 20% in the next three years.
The broker is projecting the ASX 300 share could pay an annual dividend per share of 27 cents in FY26 and 33 cents in FY27. That would translate into future grossed-up dividend yields, including franking credits, of 4% and around 5%, respectively.
Ampol Ltd (ASX: ALD)
UBS describes Ampol as one of the leading transport fuel marketers and convenience store operators in the country. The broker said its operations are focused on procurement, refining, distribution, and marketing of fuels, lubricants, and a range of specialty products. It owns and operates the Lytton refinery in Queensland and has a retail convenience store presence at its service station sites.
The broker rates Ampol shares as a buy, with a price target of $31.50.
After seeing the quarterly update for the three months to June 2025, UBS said the company was finding ways to grow operating profit (EBIT) despite softer fuel volumes. Its refining margin was stronger than expected, despite a volatile period in crude oil pricing.
The convenience retail business generated modest operating profit growth year over year, thanks to a strong rebound in retail fuel margins over April and May, a stronger premium fuel mix, and consistent shop income despite what UBS believes to be continued pressure from declining tobacco sales.
UBS is forecasting the ASX dividend share's convenience retail EBIT to grow at a CAGR of 6% over the next three years.
The broker is expecting the rollout of U-Go to drive labour cost savings that "allow for a discounted fuel offer to drive fuel volume growth and improve profitability across the weaker sites in the network."
Additionally, the company is expecting the acquisition of EG Australia to boost scale and unlock synergies.
UBS is currently predicting that Ampol could pay an annual dividend per share of $1.53 in FY26 and $1.72 in FY27. This would translate into grossed-up dividend yields, including franking credits of 7.5% and 8.4%, respectively.
