Beat falling interest rates with these top ASX dividend stocks

Analysts are tipping these stocks as buys for income investors right now.

| More on:
A happy young couple lie on a wooden deck using a skateboard for a pillow.

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

sdf

With interest rates heading lower this year, now could be the time to turn to ASX dividend stocks for income.

But which stocks would be good picks for income investors? Let's take a look at two that analysts are tipping as buys. They are as follows:

Harvey Norman Holdings Limited (ASX: HVN)

The first ASX dividend stock that could help income investors beat low interest rates is Harvey Norman.

It is of course a household goods, electronics, and furniture retail giant that operates a network of company-owned and franchised stores across Australia and internationally.

The team at Bell Potter thinks that Harvey Norman would be a great option for investors right now. This is due to its attractive valuation and positive outlook being underpinned partly by the artificial intelligence (AI) megatrend. It explains:

We see HVN trading attractively at ~15x on a 1-year forward basis with multiple catalysts near/midterm such as improving sales trends in key markets assisted by a sizable upside from the AI driven upgrade cycle/replacement & spend shift to tech, gaining penetration in targeted regions in the UK in addition to the incremental earnings opportunities in its Property division as Australia's largest single owner with a $4.4b global portfolio.

In respect to dividends, Bell Potter is forecasting fully franked payouts of 25.4 cents per share in FY 2025 and then 28.1 cents per share in FY 2026. Based on the current Harvey Norman share price of $5.17, this would mean attractive dividend yields of 4.9% and 5.4%, respectively.

Bell Potter also sees plenty of upside for its shares. It has a buy rating and $6.00 price target on them.

Steadfast Group Ltd (ASX: SDF)

Another ASX dividend stock that could be a buy is Steadfast. It is an insurance broker group that provides commercial insurance solutions for SME clients.

Goldman Sachs is bullish on the company. This is due to its strong market position and the favourable operating environment. The broker explains:

We like SDF because of the industry structure favouring insurance brokers. 1) Premium rate environment remains supportive of organic growth trends (albeit moderating); 2) Little to no exposure to underwriting risk with revenues largely dependent on premiums written; 3) An opportunity to acquire EPS accretively with unlisted acquisitions at multiples accretive to earnings (including offshore); 4) A defensive business model which is relatively resilient to economic activity; 5) Valuation appeal compared to global peers.

The broker is forecasting fully franked dividends per share of 20 cents in FY 2025, 22 cents in FY 2026, and then 23 cents in FY 2027. Based on its current share price of $5.83, this equates to dividend yields of 3.4%, 3.8%, and 3.95%, respectively.

Goldman Sachs currently has a buy rating and $6.50 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 and Steadfast Group. The Motley Fool Australia has positions in and has recommended Harvey Norman and Steadfast Group. 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

Young businesswoman sitting in kitchen and working on laptop.
Dividend Investing

Where I'd invest $5,000 into ASX dividend shares

I think these stocks are appealing options.

Read more »

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

Analysts say these ASX 200 dividend shares are top picks

Let's see why they are feeling bullish about these income options.

Read more »

Clock with post it as a reminder of Tax Time
Dividend Investing

Turn your tax return into passive income with these ASX dividend shares

These are some high paying dividend shares I’m keeping an eye on. 

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Dividend Investing

These ASX dividend stocks offer 6%, 8% and 11% yields

Analysts are forecasting big yields from these buy-rated stocks.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Dividend Investing

5 fantastic ASX ETFs to buy in June with $10,000

Let's see why these funds could be good picks.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
REITs

2 ASX REITs announcing new dividends today

Money, money, money!

Read more »

A man holds his glasses up to his forehead looking gobsmacked over ASX share price rises
Dividend Investing

These ASX dividend shares could rise 25% to 60%

Brokers expect big returns and great yields from these shares.

Read more »

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

Maximising franked dividend income: Here's why I own these 2 ASX shares

I make exceptions for these two income shares.

Read more »