If you're looking for a second income, then ASX dividend shares could be the answer.
But which ones might be buys today? Two buy rated options to consider are listed below. Here's what you need to know about them:
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Healthco Healthcare and Wellness REIT (ASX: HCW)
The first ASX dividend share that could be a buy is Healthco Healthcare and Wellness REIT. It is a health and wellness-focused real estate investment trust.
Last week, Bell Potter initiated coverage on the company with a buy rating and a $1.75 price target. It believes the company has a great platform to grow from in the coming years. The broker said:
HCW's Healthscope transaction earlier this CY afforded the REIT a much more significant platform to grow from as the largest listed diversified healthcare REIT with index inclusion into the ASX300 and a meaningful +$1b development pipeline to grow into go forward.
In respect to income, the broker is expecting dividends per share of 8 cents in FY 2024 and 8.3 cents in FY 2025. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.44, this will mean yields of 5.5% and 5.75%, respectively.
Rio Tinto Ltd (ASX: RIO)
This mining giant could be an ASX dividend share to buy according to analysts at Goldman Sachs. Especially given the outlook for iron ore prices in the near term. The broker commented:
Iron ore price has continued to outperform vs. expectations in 2023. The GS commodity team now expect the global seaborne iron ore market to register a ~40Mt deficit in 2023 (previous 9Mt surplus). […] the GS commodity team have upgraded their 62% Fe price forecasts for 2023 to US$117/t (from US$101/t) and for 2024 to US$110/t (from US$90/t), with new 3/6M targets of US$130/US$120/t signaling modest upside relative to the forward curve.
It is for this reason that the broker has just reiterated its conviction buy rating and lifted its price target to $136.10.
As for dividends, the broker is expecting these stronger iron ore prices to underpin fully franked dividends per share of US$4.50 (A$6.91) in FY 2024 and then US$4.10 (A$6.30) in FY 2025. Based on the latest Rio Tinto share price of $125.61, this will mean yields of 5.5% and 5%, respectively.
