Fortunately for income investors, the Australian share market is home to countless dividend shares that provide investors with attractive yields.
Two from opposite sides of the market that are highly rated right now are listed below. Here's why analysts say they are buys:
South32 Ltd (ASX: S32)
The first ASX dividend share that brokers have named as a buy is diversified mining and metals company South32. Morgans is a fan and has an add rating and $5.60 price target on the miner's shares.
This is due to its attractive valuation, the de-risking of its growth portfolio, and its earnings-linked dividend policy. Last week, the broker commented:
We maintain a positive view on S32. The company offers an attractive mix of raw material and base metal exposures, combined with an effective management team. S32 continues to deploy capital efficiently, while gradually transitioning its portfolio out of trickier assets and into more base metals focus (with acquisitions in copper and zinc).
As for dividends, the broker is forecasting fully franked dividends per share of approximately 23 cents in FY 2023 and FY 2024. Based on the current South32 share price of $4.71 this will mean yields of 4.9%.
Suncorp Group Ltd (ASX: SUN)
This banking and insurance giant could be a top ASX dividend share to buy. That's the view of analysts at Goldman Sachs, which have just initiated coverage on the company with a buy rating and $13.88 price target.
There are a number of reasons for its bullish view, Goldman explained two of them last week. It said:
Clear rational focus on pricing /margins to offset higher reinsurance costs, perils allowances and underlying claims inflation. We think rate increases have been strong and accelerating through 1H23. […] Significant capital return opportunity remains with the potential completion of the sale of SUN bank to ANZ resulting in cash proceeds of A$4.1bn.
In respect to dividends, the broker is forecasting fully franked dividends of 78 cents per share in FY 2023 and 82 cents per share in FY 2024. Based on the latest Suncorp share price of $12.81, this implies yields of 6.1% and 6.4%, respectively.
