Looking for ASX dividend shares with strong yields and growth potential? You might be in the right place.
Brokers are backing Regal Partners Ltd (ASX: RPL) and IPH Ltd (ASX: IPH) to deliver solid cash returns via dividends to their shareholders in the coming periods.
Both companies recently posted earnings, with commendable results throughout each set of accounts.
Here's why these shares might be worth considering for your portfolio.
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ASX dividend shares in favour
ASX dividend share Regal Partners is catching the attention of analysts – more so after its half-year FY24 earnings.
The specialist alternative investment manager reported revenue growth of 212% year over year, reaching $148.5 million.
Funds under management (FUM) also surged by 50% to $16.5 billion, with net client inflows doubling to $745 million.
Regal's management also declared a fully franked dividend of 8 cents per share, up 60% from last year.
Morgans rated the stock to buy following its better-than-expected performance. It has a price target of $4.30 per share.
The broker highlighted the company's strong earnings trajectory, driven by recurring management fees and ongoing cost reductions.
Bell Potter is equally optimistic, forecasting fully franked dividends of 20.3 cents per share in both FY24 and FY25.
At the current share price, this represents a dividend yield of around 6%.
If the ASX dividend share hits Bell Potter's price target of $4.75, the total return would be 41%, and 47%, including the dividend yield.
IPH poised for dividend growth
Intellectual property services provider IPH is another ASX dividend share that brokers are backing.
The company posted 23% sales growth in its FY24 results, pulling this to dividends of 19 cents per share, up 8%.
Goldman Sachs reaffirmed its buy rating on IPH shortly after the release with a price target of $8.25.
It believes IPH's leading market position in Australia, New Zealand, and Singapore, along with its expansion into other markets, positions the company well for consistent earnings growth:
Positively, IPH's B/S returned to its <2x ND/EBITDA gearing range ~6 months ahead of schedule. IPH's ambitions to streamline the business may have a positive impact on organic growth and group margins heading into FY26E, which could drive upside to our estimates…
Earnings that will translate into dividend growth.
The broker expects IPH to deliver fully franked dividends of 37 cents per share in FY25 and 40 cents per share in FY26.
At the current share price of $6.18 apiece before market open on Thursday, these dividends translate to yields of 6% and 6.4%, respectively.
ASX dividend shares takeout
Experts say Regal Partners and IPH are two ASX dividend shares that offer a combination of yield and growth potential.
With interest rates likely to come down at some point in the future, locking in these yields could outpace most high-yield savings accounts. Except with the prospect of capital growth.
