Buy BHP and this ASX dividend share: Analysts

What are analysts saying about these income options? Let's dig deeper.

| More on:
A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements

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

The good news for income investors is that there are plenty of ASX dividend shares to choose from on the local market.

But which ones could be in the buy zone next week?

Two that analysts are tipping as top buys are listed below. Here's what they are saying about them:

BHP Group Ltd (ASX: BHP)

This mining giant's shares were on fire last week after the Chinese government announced new stimulus measures to support economic growth.

The good news is that Goldman Sachs doesn't think that it's too late to invest in the Big Australian.

Its analysts recently stated that they think BHP's shares are attractively priced. They said:

BHP is currently trading at ~6.0x NTM EBITDA (25-yr average EV/EBITDA of 6.6x), a slight premium to RIO on ~5.5x; and at 0.9xNAV vs RIO at 0.8xNAV. Over the last 10 years, BHP has traded at a ~0.5x premium to global mining peers. We believe this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers).

As for dividends, Goldman expects fully franked dividends per share of US$1.16 (A$1.69) in FY 2025 and then US$1.13 (A$1.64) in FY 2026. Based on its current share price of $44.74, this equates to dividend yields of 3.8% and 3.7%, respectively.

Goldman has a buy rating and $48.80 price target on its shares.

Regal Partners Ltd (ASX: RPL)

Another ASX dividend share that gets the thumbs up from analysts is Regal Partners.

It is the alternative investment manager that has been in the headlines this month after tabling a takeover bid for Platinum Asset Management Ltd (ASX: PTM).

Bell Potter believes the company is well-placed for growth. It said

We continue to favour RPL, given its strong organic & inorganic growth potential, and entrepreneurial culture. In the last six months, and following the recent acquisition of PM Capital and Taurus (50%), the firm has shown an acceleration of inflows, strong investment performance (which will give rise to performance fees) and success in marketing new funds. We feel this strong performance is not reflected in the share price and see considerable upside.

The broker expects this to support fully franked dividends per share of 19.5 cents in FY 2025 and 22.1 cents in FY 2026. Based on its current share price of $3.63, this represents dividend yields of 5.4% and 6.1%, respectively.

Bell Potter has a buy rating and $4.97 price target on its shares.

Motley Fool contributor James Mickleboro 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 no position in any of the stocks mentioned. 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

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Dividend Investing

Big dividends: A 7% ASX ETF to buy for income this week

This ETF is a great choice when you can't find anything else...

Read more »

A woman sits at a table with notebook on lap and pen in hand as she gazes off to the side with the pen resting on the side of her face as though she is thinking and contemplating while a glass of orange juice and a pair of red sunglasses rests on the table beside her.
Dividend Investing

The smartest ASX dividend shares to buy with $3,000 right now

These businesses offer a pleasing dividend yield and great value.

Read more »

Happy woman working on a laptop.
Dividend Investing

The smartest ASX dividend stocks to buy with $1,000 right now

High yields are hard to find these days.

Read more »

Different Australian notes.
ETFs

Own the Vanguard US Total Market Shares Index ETF? Here's your next dividend

Vanguard announced the final distribution amount for VTS ETF investors today.

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

Own SPDR ASX ETFs? Here is your next dividend and when you'll receive it

State Street Global Advisors announced distribution payment amounts and dates today.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Dividend Investing

Forget CBA shares and buy these ASX dividend stocks

Analysts think these shares are better buys that CBA right now.

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

3 ASX dividend shares to buy to beat falling interest rates

Analysts think these buy-rated shares could generate great yields.

Read more »

An oil refinery worker stands in front of an oil rig with his arms crossed and a smile on his face as the Woodside share price climbs today
ETFs

This ASX ETF has a 4% dividend yield. Should you buy for income?

There aren't too many ETFs offering more than 4% right now...

Read more »