Buy and hold investing can be a great way to grow your wealth. Especially if you can identify Australian dividend shares that have the potential to grow their payouts materially over the long term.
Two shares that analysts think could do this are listed below. Here's what they are recommending:
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Accent Group Ltd (ASX: AX1)
The first Australian dividend share that could be a top buy and hold option is Accent Group.
It is the footwear focused retailer responsible for a growing number of brands such as Platypus, Style Runner, and Hype DC. It also has exclusive distribution rights for major global brands in the region.
Bell Potter thinks that recent share price weakness has created an opportunity to buy this stock at a cheap price and benefit from big dividend yields. It recently said:
In the near term, we expect monetary policy catalysts to drive recovery in the lifestyle segment from 2Q26e, while in the medium-long term, we see a higher growth focus for AX1 leveraging the outperforming sports segment via dominant global partner and key shareholder, FRAS.
With the first Sports Direct store opening in mid-November, we anticipate the unlocking of the sizable store roll-out opportunity for the banner in Australia (50-store target over 6 years), while benefiting from a higher relevance to leading brand partners such as Nike backed by FRAS.
The broker expects this to underpin fully franked dividends of 7.8 cents in FY 2026 and then 9.2 cents in FY 2027. Based on its current share price of $1.32, this equates to dividend yields of 5.9% and 7%, respectively.
Bell Potter has a buy rating and $1.80 price target on its shares.
Coles Group Ltd (ASX: COL)
Coles could be an Australian dividend share to buy and hold forever.
As one of the big two supermarket operators, it is one of the most reliable dividend payers on the market. Its defensive business model means it can generate consistent earnings through all parts of the economic cycle.
Bell Potter is also bullish on this one and recently upgraded its shares. It said:
NPAT forecasts are unchanged in FY26e and -3% in FY27e. Our target price lifts to $24.30ps (prev. $22.10ps) principally on model roll forward and lower net debt. Upgrade to Buy (from Hold). Continued delivery against 'Simplify & Save' initiatives ($565m delivered to date vs. a target of $1Bn by FY27e), generating a return on ADC/CFC investments (~$1.45Bn investment and $103m of start-up costs in FY25) and a strengthening consumer backdrop are all reasons for a more favourable view.
As for income, the broker is forecasting fully franked dividends of 71 cents per share in FY 2026 and then 74 cents per share in FY 2027. Based on its current share price of $23.31, this would mean dividend yields of 3% and 3.2%, respectively.
Bell Potter has a buy rating and $24.30 price target on its shares.
