Buy these dirt cheap ASX dividend stocks before it's too late

Analysts are bullish on these income options. Let's find out why.

| 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
  • Rural Funds Group is considered undervalued with a significant discount to its market NAV and offers resilience in asset values; it promises a 6% dividend yield for FY 2026 and FY 2027, with a potential 25% share price upside according to Bell Potter.
  • Universal Store Holdings is praised for its effective rollout strategy in the youth fashion sector, with projected earnings growth of 10% annually; it offers dividend yields of 4.3% for FY 2026 and 4.8% for FY 2027, with an attractive forward P/E ratio of about 16x.
  • Bell Potter has buy ratings for both stocks, highlighting their current undervaluation and potential for substantial returns through dividends and capital growth as they execute strategic plans.

Are you looking for some new ASX dividend stocks to buy?

If you are, then it could be worth considering the two listed below.

They have been named as buys and are tipped to offer good dividend yields in the near term. Here's what you need to know about them:

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.

Image source: Getty Images

Rural Funds Group (ASX: RFF)

Bell Potter thinks that Rural Funds could be an ASX dividend stocks to buy.

It owns a diversified portfolio of Australian agricultural assets. From these 63 properties across five states, its strategy is to generate capital growth and income from developing and leasing agricultural assets.

The broker thinks its shares are significantly undervalued at current levels. It said:

Our Buy rating is unchanged. The -~35% discount to market NAV remain higher than average (~6% premium since listing) and likely reflects the proportion of assets that are underearning as operating farms. With a continued improvement in most counterparty profitability indicators in recent months (i.e. cattle, almond and macadamia nut prices), resilience in farming asset values and the progress made in creating headroom in funding lines to complete the macadamia development we see this as excessive.

As for income, Bell Potter expects dividends per share of 11.7 cents in both FY 2026 and FY 2027. Based on its current share price of $1.95, this would mean dividend yields of 6% for both years.

The broker currently has a buy rating and $2.45 price target on its shares, which implies potential upside of 25% for investors.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend stock that Bell Potter is positive on is Universal Store.

It is a youth fashion focused retailer behind the Universal Store, Thrills, and Perfect Stranger brands.

The broker also thinks that its shares are being undervalued at present. Especially given how well it is executing on its rollout strategy. It said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 10% p.a.. Valuation looks attractive, trading on a forward P/E of ~16x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

Bell Potter expects this to underpin fully franked dividends of 37.3 cents in FY 2026 and then 41.4 cents in FY 2027. Based on its current share price of $8.65, this represents dividend yields of 4.3% and 4.8%, respectively.

The broker has a buy rating and $10.50 price target on its shares. This suggests that upside of 20%+ is possible from current levels.

Motley Fool contributor James Mickleboro has positions in Universal Store. 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 positions in and has recommended Rural Funds Group. The Motley Fool Australia has recommended 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

View of a business man's hand passing a $100 note to another with a bank in the background.
Bank Shares

New ANZ dividend: Here's everything you need to know

ANZ's new dividend has just been revealed.

Read more »

A man points at a paper as he holds an alarm clock, indicating the ex-dividend date is approaching.
Dividend Investing

16 ASX shares going ex-dividend in May

Newmont is among the ASX shares to go ex-dividend this month.

Read more »

Man holding fifty Australian Dollar banknotes in his hands, symbolising dividends.
Dividend Investing

3 star ASX dividend income stocks for the rest of 2026

I rate these businesses as strong income buys.

Read more »

Children skipping and jumping up a hill.
Dividend Investing

Want passive income? These ASX dividend shares offer 5%+ yields

These companies grow their payouts over time.

Read more »

A golden egg with dividend cash flying out of it
Dividend Investing

These ASX dividend shares keep giving investors a pay rise

I think these businesses are excellent options for regular payout growth.

Read more »

A graphic of a pink rocket taking off above an increasing chart.
Dividend Investing

$1,000 buys 23 shares in an incredibly reliable ASX 200 dividend stock

This business offers incredible reliability with dividends.

Read more »

A happy elderly man wearing a red cape smiles as he jumps up like a hero from a massage table.
Dividend Investing

3 ASX dividend stocks I'd buy if I were a retiree

Reliable dividends often come from predictable demand. These three stocks highlight where that stability can be found.

Read more »

Beautiful young couple enjoying in shopping, symbolising passive income.
Dividend Investing

3 ASX dividend shares to build a passive income

Looking for passive income? These shares have been named as buys by analysts.

Read more »