Buy Telstra and these ASX dividend shares for passive income

Analysts think these shares are top picks for investors seeking passive income.

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Key points

  • Analysts are bullish on Accent Group, Coles Group, and Telstra Group, recommending them as ASX dividend shares for income investors.
  • Accent Group is expected to benefit from falling interest rates and brand expansion, offering attractive dividend yields based on current forecasts.
  • Coles Group and Telstra Group are valued for their defensive earnings and growth prospects, resulting in promising dividend yields.

Thankfully for passive income investors, there are plenty of ASX dividend shares out there to choose from.

To narrow things down, let's take a look at three shares that analysts are feeling bullish about and are tipping as buys. They are as follows:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that could be a buy is Accent Group. It is the owners of well-known footwear chains like Platypus, Hype DC, and The Athlete's Foot. It also has exclusive distribution rights for major global brands.

While trading conditions have been tough in recent quarters, analysts at Bell Potter believe it is worth sticking with the company. Particularly given how falling interest rates are expected to boost consumer spending. In addition, the rollout of the Sport Direct brand in Australia could be a key driver of growth over the next decade.

For now, Bell Potter is forecasting fully franked dividends of 7.8 cents per share in FY 2026 and then 9.2 cents per share in FY 2027. Based on its current share price of $1.29, this would mean dividend yields of 6% and 7.1%, respectively.

Bell Potter has a buy rating and $1.80 price target on its shares.

Coles Group Ltd (ASX: COL)

Another ASX dividend share that gets the thumbs up from analysts is supermarket giant Coles.

It is a popular option for income investors due to its defensive earnings and positive growth outlook. The latter is being underpinned by population growth and its focus on efficiency and automation in its supply chain.

Macquarie is a fan of the company and is forecasting fully franked dividends of 77 cents per share in FY 2026 and then 84 cents per share in FY 2027. Based on its current share price of $22.82, this would mean dividend yields of 3.4% and 3.7%, respectively.

The broker has an outperform rating and $25.40 price target on its shares.

Telstra Group Ltd (ASX: TLS)

A final ASX dividend share for income investors to buy could be Telstra. It is the undisputed leader in Australia's telecommunications industry, with millions of mobile and broadband customers.

This means that its revenues are highly recurring. And with demand for connectivity growing year after year, it appears well-placed for steady long term growth.

Macquarie expects this to be the case. It is forecasting fully franked dividends of 20 cents per share in FY 2026 and then 21 cents per share in FY 2027. Based on its current share price of $4.92, this would mean dividend yields of 4.1% and 4.25%, respectively.

The broker has an outperform rating and $5.04 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Accent Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Coles Group, Macquarie Group, and Telstra Group. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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