There are plenty of ASX dividend shares to choose from on the Australian share market.
Two that have been named as buys and tipped to pay above-average dividend yields are listed below.
Here's why brokers are feeling bullish on them:
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GDI Property Group Ltd (ASX: GDI)
The team at Bell Potter sees a lot of value in this property company's shares. They currently have a buy rating and 75 cents price target on its shares.
The broker believes its shares are good value based on its double-digit, three-year earnings per share growth outlook. It said:
Despite its sector low valuation metrics, GDI offers a +10% 3yr EPS CAGR which is amongst the highest amongst our coverage while many other passive REITs are still facing CoD headwinds and declining earnings growth. With 17.5% portfolio vacancy the P&L rental risk is already on foot with limited near-term expiries which suggests en masse that there could be more earnings upside than downside risk.
As for dividends, Bell Potter is expecting the company to be in a position to pay dividends per share of 5 cents in FY 2024 and FY 2025. Based on the current GDI Property share price of 65 cents, this implies yields of 7.7% in both years.
Suncorp Group Ltd (ASX: SUN)
Over at Goldman Sachs, its analysts believe that insurance and banking giant Suncorp could be an ASX dividend share to buy. The broker has a buy rating and $15.25 price target on its shares.
It likes the company due to the tailwinds that are being experienced in the general insurance market. It explains:
We are favourably disposed to Suncorp, noting in large part the tailwinds that exist in the general insurance market – i.e., very strong renewal premium rate increases and the benefit of higher investment yields. We think the strong rate momentum that SUN is getting should likely offset volume pressures as they optimise their risk exposures in certain portfolios such as home but also likely policy lapses / buy downs.
In respect to income, the broker is forecasting fully franked dividends per share of 75 cents in FY 2024 and 80 cents in FY 2025. Based on the current Suncorp share price of $13.76, this will mean yields of 5.5% and 5.8%, respectively.
