While interest rates could be heading higher in 2026, the yields on offer with term deposits are unlikely to overtake what can be found on the Australian share market.
For example, the two ASX dividend stocks named below have been rated as buys and are expected to offer attractive dividend yields in the near term.
In addition, unlike term deposits, these stocks are expected to offer mouth-watering capital gains according to analysts, creating a compelling risk/reward.
Here's what you need to know about them:
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HomeCo Daily Needs REIT (ASX: HDN)
UBS thinks that HomeCo Daily Needs REIT could be an ASX dividend stock to buy.
It is a real estate investment trust (REIT) that focuses on convenience-based retail centres such as supermarkets, pharmacies, and medical clinics. These are assets that tend to have stable tenants and long leases.
The broker believes the company is positioned to pay dividends per share of 9 cents in both FY 2026 and FY 2027. Based on its current share price of $1.27, this would mean dividend yields of 7% for both years.
In addition, UBS sees significant upside on offer with HomeCo Daily Needs REIT's shares. It has put a buy rating and $1.55 price target on them, which suggests that they could rise 22% over the next 12 months.
IPH Ltd (ASX: IPH)
Another ASX dividend stock that could be a buy according to analysts is IPH.
It is an international intellectual property services group working throughout 26 IP jurisdictions, with clients in more than 25 countries.
IPH has a diverse client base of Fortune Global 500 companies and other multinationals, public sector research organisations, SMEs, and professional services firms.
The team at Morgans remains positive on the company and believes it is well-placed to continue rewarding shareholders with big dividends.
The broker is forecasting fully franked dividends of 38 cents per share in FY 2026 and then 39 cents per share in FY 2027. Based on its current share price of $3.59, this would mean generous dividend yields of 10.6% and 10.9%, respectively.
And like the HomeCo Daily Needs REIT, there is major upside being tipped for this ASX dividend stock.
In response to its half-year results last month, Morgans reaffirmed its buy rating with a trimmed price target of $5.39. This implies potential upside of 50% for investors between now and this time next year.
