Australian income investors seeking steady returns are in luck. Three ASX heavyweights – BHP (ASX: BHP), Inghams (ASX: ING), and Orora (ASX: ORA) – have been flagged as attractive buys by analysts, offering both high dividend yields and promising growth potential.
BHP: The Mining Mainstay with Hefty Yields
BHP, the resources giant, leads the pack. Analysts at Morgans are bullish on BHP, citing its consistent generation of free cash flow that translates into sizeable dividends. They forecast fully franked dividends of around $2.42 per share in FY 2024 and $2.17 in FY 2025, translating to yields of 5.4% and 4.85%, respectively, based on the current share price.
Inghams: Undervalued Poultry Producer with Generous Payouts
Morgans also highlights Inghams, Australia’s top poultry producer. Considering its market leadership and positive consumer trends, they views Inghams as undervalued. The forecast for Inghams includes fully franked dividends of 22 cents per share in FY 2024 and 23 cents in FY 2025, resulting in yields of 5.9% and 6.2%, respectively.
Orora: Packaging Powerhouse with Potential Upside
Goldman Sachs recommends Orora, the packaging company. Although Orora’s shares have dipped in the past year, Goldman Sachs sees them as a bargain with good dividend prospects. They forecast dividends of 12 cents per share in FY 2024 and 13 cents in FY 2025, translating to yields of 6.1% and 6.55%, respectively. Additionally, Goldman Sachs sees significant upside potential for Orora’s share price.
Beyond the Headlines: Do Your Due Diligence
While these companies offer attractive yields, conducting your own research before investing is crucial. Before making investment decisions, consider factors like the company’s future outlook, risk tolerance, and diversification.
This news comes amidst a growing appetite for dividend-paying stocks in the Australian market. With interest rates expected to remain low, ASX dividend shares offer a compelling option for income-focused investors seeking steady returns.
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