2 buy-rated ASX dividend shares for income investors

These ASX dividend shares could be top options for income investors…

| More on:
Dividend stocks represented by paper sign saying dividends next to roll of cash

Image source: Getty Images

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

If you're an income investor on the lookout for dividend options, then you may want to look at the two listed below.

Here's what you need to know about them:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX dividend share for income investors to look at is banking giant ANZ.

Thanks to its positive outlook due to improving trading conditions and cost reductions, it could be a top option for income investors. In respect to the latter, ANZ aiming to reduce its cost base materially to $8 billion in the near future.

Another positive is its strong capital position. At the end of the third quarter, ANZ's CET1 ratio stood at 12.2%. This is significantly higher than APRA's unquestionably strong benchmark of 10.5%, giving the bank plenty of opportunities to return funds to shareholders. For example, ANZ's recently announced $1.5 billion share buyback is only expected to reduce its CET1 ratio by 35 basis points.

Analysts at Morgans are bullish on the bank. They currently have an add rating and $34.50 price target on ANZ's shares.

In addition, the broker is forecasting fully franked dividends of 145 cents per share in FY 2021 and then 165 cents per share in FY 2022. Based on the latest ANZ share price of $28.32, this represents yields of 5.1% and 5.8%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is this toll road operator.

Transurban has a world class portfolio of important toll roads throughout Australia and North America. These include the CityLink in Melbourne, Cross City Tunnel in Sydney, and the AirportlinkM7 in Brisbane.

Lockdowns have inevitably hit the company hard. But with the vaccine rollout going well, it may not be long until its roads are full of traffic again.

Ord Minnett remains very positive on the company. Its analysts currently have a buy rating and $15.50 price target on its shares.

As for dividends, the broker is forecasting dividends of 36.5 cents per share in FY 2022 and then 48.4 cents per share in FY 2023. Based on the current Transurban share price of $14.08, this will mean yields of 2.6% and 3.5%, respectively.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Dividend Investing

1 practically perfect Australian stock down 45% to buy now for lifelong income!

Income investors might want to check out this beaten down stock.

Read more »

A man with a wry smile on his face is shown close up behind ascending piles of coins as he places another coin on top of the tallest stack representing rising dividends
Dividend Investing

Here are the 3 biggest dividend payers in my ASX stock portfolio today

These three stocks pour cash in to my portfolio...

Read more »

A senior investor wearing glasses sits at his desk and works on his ASX shares portfolio on his laptop.
Dividend Investing

Overinvested in Fortescue shares? I'd buy these ASX dividend shares

Fortescue may not be the best choice for dividend income.

Read more »

Close up of woman using calculator and laptop for calculating dividends.
Dividend Investing

Forget term deposits! I'd buy these two ASX 200 shares instead

I’d rather buy these stocks for income than hold a term deposit right now.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Dividend Investing

Forget CBA shares and buy these ASX dividend shares

Analysts are bearish on CBA but bullish on these shares.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Own IVV ETF or other iShares ASX ETFs? Next dividends and DRP prices revealed…

BlackRock has announced the next lot of dividends for its iShares ETFs, as well as the DRP prices.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Dividend Investing

How are these passive income investors earning a 7.5% dividend yield on their surging CBA shares?

CBA shares are proving more lucrative for some passive income investors than others.

Read more »

A couple cheers as they sit on their lounge looking at their laptop and reading about the rising Redbubble share price
Dividend Investing

3 excellent ASX dividend shares to buy with $2,500

Brokers think these shares could be in the buy zone for income investors.

Read more »