3 ASX dividend shares to buy with 5%+ yields

Analysts think income investors should be buying these shares.

| 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

Fortunately for income investors, there are plenty of ASX dividend shares to choose from on the local market.

Three that could be top buys according to analysts are listed below. Here's what they are recommending to clients and the sort of yields you could expect:

Man holding out Australian dollar notes, symbolising dividends.

Image source: Getty Images

IPH Ltd (ASX: IPH)

The first ASX dividend share that could be a buy according to analysts is IPH.

It is an international intellectual property services group with a diverse client base of Fortune Global 500 companies and other multinationals, public sector research organisations, SMEs, and professional services firms.

Morgans is bullish on the company and has a buy rating and $5.39 price target on its shares.

As for income, 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.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be a buy is Rural Funds Group.

It is an agricultural real estate investment trust (REIT) that owns farmland and agricultural infrastructure. Its assets include almond orchards, cattle properties, vineyards, and macadamia farms across Australia.

Bell Potter is a fan of the company and has put a buy rating and $2.50 price target on its shares.

Rural Funds has a long history of paying steady distributions to investors and Bell Potter expects this trend to continue. It is forecasting dividends per share of 11.7 cents in FY 2026 and FY 2027. Based on its current share price of $2.04, this would mean dividend yields of 5.7%.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend share to consider buying for its generous yield is Universal Store.

Universal Store is a youth fashion retailer operating across multiple brands. Despite the challenging retail backdrop in recent years, it has continued to generate strong sales and earnings.

The team at Morgans is also positive on this one and sees it as a top pick in the small-cap space.

As a result, it has put a buy rating and $10.60 price target on the company's shares.

With respect to payouts, Morgans is forecasting fully franked dividends of 41 cents per share in FY 2026 and then 46 cents per share in FY 2027. Based on its current share price of $7.34, this would mean dividend yields of 5.6% and 6.25%, respectively.

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 IPH Ltd 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

A businesswoman looks unhappy while she flies a red flag at her laptop.
Dividend Investing

This popular ASX dividend stock has a 10% yield. That's a problem

Not all is as it seems with this popular stock.

Read more »

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

This investment fund is paying a 7.2% dividend yield after solid results

Shareholders in this fund are in the money.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Dividend Investing

2 ASX shares with dividend yields above 8%

These ASX shares could be a good option for investors looking to add to their portfolio.

Read more »

Flying Australian dollars, symbolising dividends.
Resources Shares

Everything you need to know about the BHP dividend

This is how much BHP shareholders are going to be paid.

Read more »

Four miners discussing with each other next to mining machinery.
Dividend Investing

How many BHP shares do I need to buy for $1,000 per month of passive income?

The ASX mining giant pays dividends to its shareholders every six months.

Read more »

Piles of increasing coins on Australian $100 notes.
Broker Notes

3 reasons to buy this rebounding ASX 200 dividend stock today

A leading analyst expects the rebound in this ASX 200 dividend stock has legs.

Read more »

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

These ASX 200 shares could generate $10,000 per year in passive income

These ASX shares let you earn a $10,000 annual passive income off as little as a $125,000 investment.

Read more »

Silver metallic dice showing the alphabets ETF and an up and down arrow on backgrounds of stock charts.
Dividend Investing

3 of the best dividend ASX ETFs right now for passive income

These funds boast high yields.

Read more »