Buy Rio Tinto and these top ASX dividend shares

Brokers have good things to say about the mining giant and these income stocks.

| More on:
Happy man working on his laptop.

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

sdf

Which ASX dividend shares could be top options for income investors right now?

Well, let's take a look at three stocks that analysts are currently tipping as buys. They are as follows:

Orora Ltd (ASX: ORA)

The first ASX dividend share that is being tipped as a buy is leading beverage packaging company Orora.

While it has been facing some major headwinds recently, Goldman Sachs remains positive. Particularly given the way the market is valuing its relatively new Saverglass business. It recently noted the "current market implied valuation of Saverglass provides a favourable risk-reward skew."

As for dividends, Goldman is expecting some good yields from its shares in the near term. It is forecasting dividends per share of 9 cents in FY 2025 and then 11 cents in FY 2026. Based on the current Orora share price of $2.44, this will mean dividend yields of 3.7% and 4.5%, respectively.

Goldman has a buy rating and $2.75 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX dividend share that could be a buy is mining giant Rio Tinto.

Goldman Sachs is also tipping it as a buy on valuation grounds and due to its production growth outlook.

In respect to the latter, it highlights that "RIO is a FCF and production growth story in our view, with forecast Cu Eq production growth of ~4-7% in 2025 & 2026 driven mostly by the ramp-up of the Oyu Tolgoi UG copper mine & a recovery at Escondida and Bingham, higher Pilbara Fe shipments with the ramp-up of new mines, and a rebound in aluminium production."

The broker expects this to underpin fully franked dividends of US$4.24 (A$6.26) per share in FY 2024 and then US$4.45 (A$6.57) per share in FY 2025. Based on its current share price of $111.02, this equates to dividend yields of 5.6% and 5.9%, respectively.

Goldman has a buy rating and $136.60 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend share that analysts are tipping as a buy is Universal Store. It is the youth fashion retailer behind the Universal Store, Perfect Stranger, Thrills, and Worship brands.

Bell Potter is a fan of the retailer and responded very positively to its full year results this month. It notes that its "FY24 EBIT of $47.1m came in at the top end of the pre-guided range while the DPS was a material beat driven by a payout at the top of targeted dividend policy range."

The broker also remains positive on the future "given the company's store roll-out & brand growth strategy, gross margin expansion and FY25/26e earnings trajectory."

It expects this to position the company to pay fully franked dividends per share of 32.4 cents in FY 2025 and 37.2 cents in FY 2026. Based on the current Universal Store share price of $7.00, this will mean yields of 4.6% and 5.3%, respectively.

Bell Potter has a buy rating and $7.80 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Orora. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Happy shareholders clap and smile as they listen to a company earnings report.
Dividend Investing

Broker says this dirt cheap ASX 200 stock could rise almost 50%

Bell Potter has very good things to say about this stock.

Read more »

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Dividend Investing

Beat falling interest rates with these ASX dividend shares

Analysts think these shares could be top picks for income investors in a low interest rate environment.

Read more »

A group of five people dressed in black business suits scrabble in a flurry of banknotes that are whirling around them, some in the air, others on the ground as some of them bend to pick up the money.
Dividend Investing

2 ASX 200 shares that could make it rain dividends

These stocks are sending significant passive income to shareholders.

Read more »

Close-up of a business man's hand stacking gold coins into piles on a desktop.
Dividend Investing

Buy these popular ASX dividend stocks for 4% to 6% yields

Analysts think income investors should be snapping up these stocks while they can.

Read more »

A man reacts with surprise when her see a bargain price on his phone.
Dividend Investing

1 ASX dividend stock down 42% I'd buy right now

This business could be a great undervalued stock to buy.

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Dividend Investing

Forget term deposits and buy these ASX dividend shares

Analysts think income investors should be buying these shares.

Read more »

Man smiling at a laptop because of a rising share price.
Dividend Investing

Why this little-known ASX dividend share is a top pick for this fund manager

There are multiple reasons why this fund manager is bullish on this stock.

Read more »

A young woman drinking coffee in a cafe smiles as she checks her phone.
Dividend Investing

3 blue chip ASX 200 dividend stocks to buy now

Analysts think these blue chips would be top picks for income investors.

Read more »