There is plenty for income investors to choose from on the Australian share market.
But which ASX dividend shares could be buys?
To narrow things down, let's take a look at two shares that analysts have recently tipped as buys. They are as follows:
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APA Group (ASX: APA)
APA Group could be an ASX dividend share to buy according to analysts at Macquarie.
It is an energy infrastructure company that owns a portfolio of gas pipelines, electricity grids, solar farms and wind assets across Australia.
At the last count, it owned or managed a $26 billion portfolio of energy assets. This includes 15,000km of natural gas pipelines, 692MW of renewable energy assets, and 884MW of gas-fired generation assets.
Macquarie is bullish on the company and feels its shares are attractively priced. It recently said:
Outperform. APA's FY1 EV/EBITDA of ~11.6x looks attractive vs an historical range of 11.8-13.3x. The yield of ~6.7% pa is sustainable, with growing franking in coming years. Core earnings momentum should build with cost reductions and as new investment becomes income-generating.
As for income, the broker is forecasting partially franked dividends per share of 58 cents in FY 2026 and then 59 cents in FY 2027. Based on its current share price of $8.81, this would mean dividend yields of 6.6% and 6.7%, respectively.
Macquarie has an outperform rating and $9.23 price target on its shares.
Perpetual Ltd (ASX: PPT)
Another ASX dividend share that could be a buy according to analysts is financial services company Perpetual.
The team at Bell Potter is positive on the company. It believes that its transformation positions it for a return to form and ultimately some big dividend payouts. The broker recently 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.
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.
In respect to dividends, Bell Potter is forecasting payouts of $1.25 per share in FY 2025 and then $1.42 per share in FY 2026. Based on its current share price of $21.73, this would mean dividend yields of 5.75% and 6.5%, respectively.
The broker has a buy rating and $23.00 price target on its shares.
