ASX dividend shares can be a great place to look for passive income.
But not all dividend shares are created equal. The best income options usually have dependable earnings, strong market positions, and the ability to keep rewarding shareholders through different market conditions.
With that in mind, here are three ASX dividend shares that are rated as buys by analysts and could be worth a closer look.
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Cedar Woods Properties Ltd (ASX: CWP)
Cedar Woods Properties is an ASX dividend share that could appeal to income investors.
The property developer has a diversified portfolio of residential communities, townhouses, apartments, and commercial projects across Australia. This gives it exposure to long-term demand for housing, particularly in markets where population growth and housing shortages remain important themes.
Bell Potter is bullish and expects Cedar Woods to pay dividends of 38 cents per share in FY 2026 and 41 cents per share in FY 2027. Based on its current share price of $6.84, this represents dividend yields of 5.5% and 6%, respectively.
The broker has a buy rating and $9.65 price target on its shares.
Lottery Corporation Ltd (ASX: TLC)
Another ASX dividend share that could be a top pick is Lottery Corporation.
It operates lotteries and Keno across Australia, giving it exposure to a highly cash-generative and relatively defensive form of consumer spending. While jackpot activity can influence short-term performance, lotteries have historically shown resilience through different economic conditions.
That defensive profile can be attractive for income investors. The company benefits from well-known brands, large customer reach, and exclusive or long-dated licences in key markets. These characteristics can support strong cash generation, which is important for dividends.
The team at UBS believes this will underpin fully franked dividends of 17 cents per share in FY 2026 and then 21 cents per share in FY 2027. Based on its current share price of $5.34, this would mean dividend yields of 3.2% and 3.9%, respectively.
UBS has a buy rating and $6.35 price target on its shares.
Telstra Group Ltd (ASX: TLS)
Telstra remains one of the most popular ASX dividend shares for income investors and it isn't hard to see why.
The telco giant has a defensive earnings profile, supported by millions of mobile, broadband, and enterprise customers across Australia. Its services are essential for households and businesses, which gives the company a level of resilience that many other businesses do not have.
The mobile division is the key growth driver. Telstra has the largest mobile network in Australia and continues to benefit from strong demand for data, connectivity, price increases, and premium network coverage. This has been supporting steady earnings growth and cash flow generation.
Morgan Stanley expects this to lead to franked dividends of 20 cents per share in FY 2026 and then 21 cents per share in FY 2027. Based on its current share price of $5.23, this represents dividend yields of 3.8% and 4%, respectively.
The broker has an overweight rating and $5.40 price target on its shares.
