For income investors, the start of a new year can be a great time to reassess a portfolio and look for reliable dividend payers that can deliver cash flow through the months and years ahead.
While interest rates and bond yields can move around, high-quality ASX dividend shares remain one of the most effective ways to generate growing income over time.
With that in mind, here are two ASX dividend shares that could be among the best to buy in January.
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HomeCo Daily Needs REIT (ASX: HDN)
For investors seeking defensive income, HomeCo Daily Needs REIT could be an ASX dividend share to consider buying.
This real estate investment trust (REIT) owns a diversified portfolio of convenience-based retail assets, including neighbourhood centres, large-format retail, and health and services properties. Many of these assets are leased to essential retailers such as supermarkets, hardware chains, and service providers, which tend to be more resilient across economic cycles.
HomeCo's long lease durations, 99% occupancy rate, and exposure to tenants with strong operating profiles provide good visibility over rental income. This, in turn, has supported consistent distributions to shareholders over the years.
UBS expects this trend to continue and is forecasting dividends per share of 8.6 cents in FY 2026 and then 8.7 cents in FY 2027. Based on its current share price of $1.35, this would mean dividend yields of 6.4% and 6.45%, respectively.
UBS currently has a buy rating and $1.53 price target on the company's shares.
Universal Store Holdings Ltd (ASX: UNI)
Universal Store may not be the first name that comes to mind for income investors, but it has quietly built an impressive dividend track record.
The youth fashion retailer operates the Universal Store, Thrills, and Perfect Stranger brands and has demonstrated an ability to grow earnings even in challenging retail conditions. Its focus on private-label products has supported margins, while disciplined cost control has helped protect profitability.
Importantly for dividend investors, Universal Store generates strong cash flow and carries a relatively clean balance sheet. This has allowed it to return a meaningful portion of its profits to shareholders through attractive fully franked dividends.
Bell Potter is a big fan of the company and recently put a buy rating and $10.50 price target on its shares.
As for income, it is expecting fully franked dividends of 37.3 cents per share in FY 2026 and then 41.4 cents per share in FY 2027. Based on its current share price of $7.99, this would mean dividend yields of 4.7% and 5.2%, respectively.
