These ASX dividend shares could be better than CBA

Analysts see these top shares as great alternatives for income investors.

| More on:
Wife and husband with a laptop on a sofa over the moon at good news.

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

Commonwealth Bank of Australia (ASX: CBA) shares have been on an incredible run over the past 12 months.

While this is great news for shareholders, it has left Australia's largest bank's shares trading on sky high earnings multiples.

This means there are significant downside risks to buying at current levels. Especially when the consensus valuation estimate sits around 35% below where its shares trade today.

In light of this, income investors may want to look beyond CBA when they are searching for ASX dividend shares to buy.

With that in mind, here are a couple of dividend shares that analysts at Bell Potter think could be better options. They are as follows:

Harvey Norman Holdings Limited (ASX: HVN)

The first ASX dividend share that could be a great alternative for income investors is retail giant Harvey Norman.

That's the view of analysts at Bell Potter, which are feeling very positive about the company. This is due to their belief that it stands to benefit greatly from an artificial intelligence driven major upgrade/replacement cycle of devices purchased during the COVID-19 pandemic.

The broker expects this to support the payment of fully franked dividends of 25.9 cents per share in FY 2025 and then 28.5 cents per share in FY 2026. Based on the current Harvey Norman share price of $5.13, this equates to attractive 5% and 5.5% dividend yields, respectively.

Bell Potter currently has a buy rating and $5.80 price target on its shares. This implies potential upside of 13% for investors between now and this time next year.

Smartgroup Corporation Ltd (ASX: SIQ)

Another ASX dividend share that could be a better option that CBA today is Smartgroup. It is a leading provider of employee benefits, end-to-end fleet management, and software solutions.

Bell Potter is also feeling very positive about Smartgroup and thinks it would be a great pick for income investors. This is due to its defensive business, favourable tailwinds, and attractive valuation.

In respect to dividends, the broker is forecasting fully franked dividends of 53.3 cents in FY 2024 and then 59.7 cents in FY 2025. Based on its current share price of $7.84, this means big potential dividend yields of 6.8% and 7.6%, respectively.

Bell Potter currently has a buy rating and $10.00 price target on its shares. This implies potential upside of almost 28% for investors over the next 12 months.

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Harvey Norman and Smartgroup. 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 holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Buy these highly rated ASX dividend stocks for 5% to 6% yields

These stocks could be quality picks for income investors according to analysts.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Dividend Investing

With an almost 7% dividend yield, is this ASX 200 share a buy?

This business offers significant passive income potential.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

These high-yield ASX dividend shares smash term deposits

Analysts think these shares could be top picks for Aussie income investors.

Read more »

children and teacher in childcare education setting
Dividend Investing

1 ASX dividend stock down 30% I'd buy right now

I think this business offers investors both income and potential capital growth.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Dividend Investing

Why I think these 2 ASX dividend shares are ideal for income investors

These stocks offer pleasing income.

Read more »

A mature aged man with grey hair and glasses holds a fan of Australian hundred dollar bills up against his mouth and looks skywards with his eyes as though he is thinking what he might do with the cash.
Dividend Investing

3 ASX ETFs to boost passive income

These 3 ASX ETFs offer particularly attractive yields.

Read more »

Happy man holding Australian dollar notes, representing dividends.
Dividend Investing

The easy way to earn $1,000 a month in dividends from the ASX

This is an easy way to generate monthly income from the share market.

Read more »

A retiree relaxing in the pool and giving a thumbs up.
Dividend Investing

An 8 percent dividend stock paying cash every month

Dreams really do come true on the ASX.

Read more »