Analysts name 3 of the best ASX dividend shares to buy

Analysts are feeling bullish about these names. Let's find out why.

Key points
  • Coles Group is lauded for its reliable dividends, driven by steady grocery demand, with Morgan Stanley forecasting appealing yields backed by strong cashflow and a robust market position.
  • HomeCo Daily Needs REIT benefits from its essential-service retail focus, offering resilience against economic shifts and attractive yields, with UBS supporting its inclusion in income-focused portfolios.
  • IPH stands out with its consistent cash generation and substantial dividends from its global IP services, making it a top pick for defensive income, as endorsed by Morgans with a standout dividend yield.

For investors focused on passive income, the Australian share market offers no shortage of high-yield opportunities.

To narrow things down, let's take a look at three that analysts think could be among the best to buy now. Here's what they are recommending to clients:

A group of businesspeople clapping.

Image source: Getty Images

Coles Group Ltd (ASX: COL)

A name that deservedly attracts attention from income investors is Coles Group. As one of Australia's largest supermarket chains, it benefits from the kind of steady, recession-resistant demand that makes for dependable cashflow. People will always buy groceries, and that stability helps underpin the company's dividends year after year.

The team at Morgan Stanley expects this to continue in the near term. It is forecasting fully franked dividends of 83 cents per share in FY 2026 and then 90 cents per share in FY 2027. Based on its current share price of $22.33, this would mean dividend yields of 3.7% and 4%, respectively.

Morgan Stanley has an overweight rating and $26.50 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that brokers are recommending is the HomeCo Daily Needs REIT. It is a property trust specialising in essential-service retail centres. Its portfolio includes supermarkets, pharmacies, healthcare clinics, and other everyday-needs retailers that typically hold long, stable leases.

This focus on essential retail makes the REIT relatively resilient to economic swings, and the cashflows have historically supported solid distributions.

UBS believes this will remain the case. It is forecasting dividends of 9 cents per share in FY 2026 and again in FY 2027. Based on its current share price of $1.33, this would mean sizeable dividend yields of approximately 6.8% for both years.

UBS has a buy rating and $1.53 price target on its shares.

IPH Ltd (ASX: IPH)

A third ASX dividend share analysts are backing is IPH. It is a global intellectual property services group that helps clients protect their patents, trademarks, and intellectual property across multiple jurisdictions. This is a service that is always in demand regardless of the economic cycle.

Its defensive revenue profile, strong cash conversion, and disciplined capital management have allowed the company to pay generous dividends over many years. Morgans expects this trend to continue, forecasting fully franked dividends of 37 cents per share in FY 2026 and FY 2027. At today's share price of $3.63, this implies a massive 10% dividend yield for both years.

Morgans has a buy rating and $6.05 price target on its shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and IPH Ltd. 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

Smiling woman with her head and arm on a desk holding $100 notes, symbolising dividends.
Dividend Investing

Vanguard ETFs will pay dividends today. Here's how much

Vanguard manages some of the most popular ASX ETFs including VAS, VHY, VGS, and VEQ.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

2 ASX dividend shares with 40% to 120% upside

A leading broker sees big yields and bigger returns on offer here.

Read more »

Woman holding $50 and $20 notes.
Dividend Investing

Dividend payday for ASX ETF investors! Here is how much you'll get

Own ASX A200, DHHF, or other Betashares ETFs? You will receive dividends today.

Read more »

A wallet with an Australian one hundred dollar note poking out sits on top of an electricity meter with the numbers rapidly going up.
Dividend Investing

How many Origin Energy shares do I need for $1,000 per month of passive income in FY27?

Find out what it takes to earn $12,000 every year in passive income.

Read more »

Woman with headphones on relaxing and looking at her phone happily.
Dividend Investing

Why this ASX dividend share is a retiree's dream for 2027

This business is a strong pick for dividends, in my view.

Read more »

Man reading his emails on a laptop while relaxing on a beach.
Dividend Investing

WAM Leaders vs Growthpoint Properties: Which 7%+ yield stock looks better for passive income?

Chasing passive income? Here’s which high-yield stock I think looks better.

Read more »

Man holding out $50 and $100 notes in his hands, symbolising ex dividend.
Dividend Investing

2 ASX shares with dividend yields above 9%

These stocks offer very high dividend yields.

Read more »

Person holding Australian dollar notes, symbolising dividends.
Dividend Investing

3 great ASX dividend shares with 7%+ yields

These ASX shares pay an attractive dividend yield to their shareholders.

Read more »