Buy Qantas and these ASX dividend shares

Analysts think these shares could be top buys for income investors.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Qantas is soaring with the potential for rising dividends and a strong recovery trajectory.
  • HomeCo Daily Needs REIT stands out for its reliable income streams backed by essential service tenants.
  • Universal Store Holdings defies the retail slump with impressive dividend growth prospects.

If you're looking for ASX dividend shares to bolster your income portfolio, then read on!

That's because listed below are three that analysts rate as buys and expect great dividend yields from in the near term. Here's what you need to know about them:

Smiling woman looking through a plane window.

Image source: Getty Images

Qantas Airways Ltd (ASX: QAN)

Qantas is Australia's flagship airline, and after a couple of turbulent years during the pandemic, the company has come back stronger than ever.

It didn't waste a crisis and used that time to rebuild its balance sheet, cut costs, and modernising its fleet.

And with fuel costs trending lower and passenger demand still robust, Qantas is now generating strong cash flows. This has allowed the airline to resume dividend payments and undertake share buybacks.

The team at Macquarie expects Qantas to increase its dividend in the coming years. It is forecasting fully franked dividends of 53.4 cents per share in FY 2026 and then 65 cents per share in FY 2027. Based on its current share price of $10.87, this would mean dividend yields of 4.9% and 6%, respectively.

Macquarie has an outperform rating and $12.29 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

For investors wanting a steady income stream, the HomeCo Daily Needs REIT could be a top choice. This real estate investment trust owns a diversified portfolio of convenience-based retail assets across Australia. This includes supermarkets, medical centres, and essential services.

This focus on daily needs tenants makes the ASX dividend share more resilient than traditional retail property owners. Especially given that the majority of its tenants are large, stable businesses such as Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL), which provide defensive cash flows even during economic downturns.

UBS believes the company is positioned to pay dividends of 8.6 cents per share in FY 2026 and then 8.7 cents per share in FY 2027. Based on its current share price of $1.39, this equates to dividend yields of 6.2% and 6.25%, respectively.

The broker currently has a buy rating and $1.53 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

A third ASX dividend share that could be a buy is Universal Store. It is one of Australia's most successful youth fashion retailers, operating brands such as Perfect Stranger, Thrills, and of course Universal Store.

Despite a challenging retail environment, the company continues to deliver solid profit growth and dividend growth.

Bell Potter expects this to continue and is forecasting fully franked dividends of 36.8 cents per share in FY 2026 and then 41.1 cents per share in FY 2027. Based on its current share price of $8.87, this would mean dividend yields of 4.1% and 4.6%, respectively.

The broker has a buy rating and $10.50 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Universal Store and Woolworths 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 Macquarie Group and Woolworths Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

ETF written in white on a multi coloured background.
Dividend Investing

Why I'd buy these 2 ASX ETFs for $10,000 a year in passive income

These two ASX ETFs provide a diversified means to earning a $10,000 yearly passive income.

Read more »

Woman holding $50 and $20 notes.
Dividend Investing

8 ASX shares going ex-dividend next week

Commonwealth Bank, Resmed, and AMP are among the ASX shares with ex-dividend dates next week.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

Why I'd buy Telstra and these ASX dividend shares for passive income

These shares offer the type of qualities I would want from passive income investments.

Read more »

Close-up of a business man's hand stacking gold coins into piles on a desktop.
Dividend Investing

2 ASX dividend shares I'd buy today for passive income

These ASX dividend shares can deliver a strong passive income investors.

Read more »

Australian notes and coins symbolising dividends.
Communication Shares

Everything you need to know about the Telstra dividend

Owners of Telstra shares can look forward to another good dividend.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Bank Shares

Revealed: The ASX bank share with the highest dividend yield today

The highest-yielding bank right now might surprise you.

Read more »

An older gentleman leans over his partner's shoulder as she looks at a tablet device while seated at a table.
Dividend Investing

134,814 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension

I’d say this ASX stock is more appealing than the Age Pension.

Read more »

A man in a sweatshirt holds two different phones to compare telco services.
Dividend Investing

How many Telstra shares do I need to buy to generate $10,000 in passive income?

Telstra pays two fully-franked dividends per year.

Read more »