There are a lot of ASX income shares out there for investors to choose from at present.
Two that are highly rated are named below. Here's what analysts are saying about them:
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Cedar Woods Properties Limited (ASX: CWP)
Analysts at Morgans are positive on this property company and think it could be an ASX income share to buy.
The broker has Cedar Woods' shares on its best ideas list with an add rating and $5.60 price target.
Its analysts believe the company's shares are undervalued and deserve to trade on higher multiples. They said:
CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP's exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.
In respect to income, Morgans is forecasting dividends per share of 18 cents in FY 2024 and then 20 cents in FY 2025. Based on the current Cedar Woods Properties share price of $4.60, this will mean dividend yields of 3.9% and 4.35%, respectively.
Healthco Healthcare and Wellness REIT (ASX: HCW)
Another ASX income share that could be a buy next week is the Healthco Healthcare and Wellness REIT.
Bell Potter is a big fan of the health and wellness focused property company and has a buy rating and $1.50 price target on its shares.
It believes that recent weakness has created a compelling buying opportunity for investors. The broker said:
HCW has underperformed the REIT sector last 3 months (-10% vs. +22% XPJ) following bond yield reversion and is attractively priced at 20% discount to NTA (but only REIT to record flat to positive valuation movement at 1H24) with double digit 3 year EPS CAGR given high relative sector debt hedging and ability to grow its $1bn development pipeline via attractive YoC spread to marginal cost of debt. Longer term, HCW has significant scope for growth with an estimated $218 billion addressable market where an ageing and growing population should underpin long-term sector demand.
As for dividends, Bell Potter is forecasting dividends per share of 8 cents in FY 2024 and then 8.3 cents in FY 2025. Based on its current share price of $1.15, this would mean generous yields of 6.95% and 7.2%, respectively.
