Looking for some generous dividend yields for your income portfolio? If you are, then check out the two ASX dividend shares listed below.
Brokers are feeling very positive about these stocks and are tipping them as top buys. Let's hear what they are saying about them:
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Nickel Industries Ltd (ASX: NIC)
Bell Potter thinks that Nickel Industries could be a top option if you're not averse to investing in the resources sector.
It is a globally significant, low-cost producer of nickel pig iron (NPI), which is a key ingredient in stainless steel production. Despite rising 33% over the past 12 months, Bell Potter still thinks that its shares are undervalued. Particularly given its positive growth outlook and attractive dividend yield. It said:
NIC is the only pure-play producer of scale on the ASX providing exposure to the nickel price, with earnings diversified across Type 1 and Type 2 nickel. Its aggressive growth profile is fully funded, it is currently moving through the peak CAPEX phase which we forecast to drive strong earnings growth in CY25 and CY26. NIC has long-life assets with demonstrated ability to make money through the nickel price cycle while also sustaining a supportive (unfranked) dividend which we forecast to grow. At these levels it trades on undemanding valuation multiples.
Bell Potter expects Nickel Industries to pay 5 cents per share dividends in FY 2024 and FY 2025. Based on its current share price of 95 cents, this would mean dividend yields of 5.3% in both years.
The broker currently has a buy rating and $1.47 price target on its shares.
Origin Energy Ltd (ASX: ORG)
Over at Goldman Sachs, its analysts think that Origin Energy could be an ASX dividend share to buy. It is of course a leading provider of electricity, gas, LPG, solar, and internet to homes and businesses across the country.
The broker likes Origin Energy due partly to the APLNG business, which it expects to support big dividend payments in the coming years. It said:
We are Buy rated on ORG considering: APLNG earnings diversification to support strong FCF & returns: We expect electricity markets will remain volatile where ~50% of FY25E EBITDA from APLNG should reduce risk, while supporting a strong 9% FCF yield and 6% dividend yield.
Goldman believes this positions Origin Energy to pay fully franked dividends per share of 59 cents in FY 2025 and then 43 cents in FY 2026 and 63 cents in FY 2027. Based on its current share price of $9.70, this would mean dividend yields of 6.1%, 4.4%, and 6.5%, respectively.
The broker currently has a buy rating and $10.45 price target on its shares.
