2 ASX dividend shares brokers are backing right now

These 2 dividend players are firmly on analyst radars this year.

| More on:

Should you invest $1,000 in St Barbara Limited right now?

Before you buy St Barbara Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and St Barbara Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

A couple makes silly chip moustache faces and take a selfie on their phone.

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

Looking for ASX dividend shares to add to your ASX portfolio? Brokers are currently backing Telstra Group Ltd (ASX: TLS) and Eagers Automotive Ltd (ASX: APE) as top contenders.

Both companies offer reasonable dividend yields, and brokers are positive on their growth prospects, making them candidates for long-term investors.

Let's take a closer look at why the experts rate these 2 ASX dividend shares.

ASX dividend shares for the future

Telstra continues to capture the attention of brokers as a reliable ASX dividend share.

The telecommunications giant reported decent earnings growth in FY24, supported by its mobile business and improving margins in the NBN segment.

At its current share price of $3.88 apiece, Telstra's trailing dividend yield is 4.6%. Brokers believe Telstra's dividends will continue to grow steadily moving forward.

Goldman Sachs retained its buy rating on Telstra in a recent note, with an improved price target of $4.35 per share. It is bullish on the telco's resilient earnings, saying:

Telstra is the incumbent telecom operator in Australia. We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.

Although at a headline level, Telstra valuation appears relatively full…we note: (1) Adjusting out NBN recurring payments (a unique asset), Telstra trades at a much more compelling multiple; (2) Although its yield spread is compressed vs. history, when factoring dividend growth this is more attractive.

Goldman expects fully franked dividends of 19 cents per share in FY25, rising to 20 cents per share in FY26.

This translates to dividend yields of 4.9% and 5.1% based on today's share price.

With projected earnings and dividend growth, Telstra is poised to keep its place on the mantlepiece as a top ASX dividend share.

Eagers Automotive in favour

Eagers Automotive is another ASX dividend share that brokers are backing. It is one of Australia's leading automotive retail groups, operating for over a century.

The stock has had a difficult last 12 months, down 32%. But brokers are bullish on its outlook.

On the valuation front, Morgans rates Eagers a buy with a $14 price target, indicating a 33% upside potential.

It is joined by Ord Minnett, with a buy rating and $12.80 apiece valuation.

Meanwhile, Bell Potter also has a buy rating on Eagers with a price target of $13 per share. The broker believes Eagers has more room to run and forecasts fully franked dividends of 74 cents per share in FY25.

This gives investors a dividend yield of 7% at the current share price.

Consequently, Eagers is one of the higher-yielding ASX dividend shares, a feature that income investors may find appealing.

Compared to most high-interest savings accounts, this one takes the cake, especially with the prospects of additional capital gains, if those bullish brokers are correct.

Foolish takeaway

Telstra and Eagers Automotive stand out as two ASX dividend shares that brokers believe offer solid returns.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. 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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Eagers Automotive Ltd. 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

A man closesly watch a clock, indicating a delay or timing issue on an ASX share price movement
Dividend Investing

Little time left to snap up the next dividend from ANZ shares

ANZ shares will pay an interim dividend of 83 cents per share on 1 July.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Dividend Investing

3 excellent ASX dividend stocks to buy with $3,000

Analysts believe these shares could be quality picks for Aussie income investors.

Read more »

A man smiles as he holds bank notes in front of a laptop.
Dividend Investing

Overinvested in Fortescue? Here are two alternative ASX dividend shares

Here are other ideas beyond Fortescue offering large dividends.

Read more »

Engineer on a laptop.
Dividend Investing

1 ASX dividend stock down 28% I'd buy right now

This stock is a powerful pick for passive income.

Read more »

The sea's vastness is rivalled only by the refreshing feel of the drinks two friends share as they saunter along its edge, symbolising passive income.
Dividend Investing

Which ASX 200 bank stock pays the most passive income?

What’s the best ASX 200 bank to invest for passive income?

Read more »

A man looking at his laptop and thinking.
Dividend Investing

Here's the ANZ dividend forecast through to 2027

It looks like we might have seen the peak for this bank's dividends.

Read more »

A smiling woman holds a Facebook like sign above her head.
Dividend Investing

Bell Potter names the best ASX dividend shares to buy in May

Bell Potter thinks these are among the best shares for income investors to buy right now.

Read more »

A businesswoman on the phone is shocked as she looks at her watch, she's running out of time.
Dividend Investing

Hoping to bank the next dividend from NAB shares? Better hurry…

NAB shares will pay an interim dividend of 85 cents per share next month.

Read more »