Should you buy BHP and these ASX dividend shares?

MotleyFool
2024-09-23

Income investors that are on the lookout for some good dividend yields might want to check out the ASX dividend shares in this article.

That's because analysts are tipping them to provide yields of 4%+ in the near term. But are they in the buy zone? Let's find out.

BHP Group Ltd (ASX: BHP)

The team at Goldman Sachs thinks that BHP's shares are undervalued at current levels, which could make it a good ASX dividend share to buy.

The broker likes the mining giant due to its growing exposure to copper. It notes that BHP is poised to increase its copper EBITDA from US$8.6 billion to US$11.9 billion in FY 2025 due to ongoing supply side challenges and increasing demand.

Goldman expects this to underpin fully franked dividends per share of US$1.16 (A$1.70) in FY 2025 and then US$1.13 (A$1.66) in FY 2026. Based on its current share price of $40.34, this equates to dividend yields of 4.2% and 4.1%, respectively.

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

Healthco Healthcare and Wellness REIT (ASX: HCW)

Analysts at Bell Potter say that HealthCo Healthcare & Wellness REIT could be a buy. It is a real estate investment trust with a mandate to invest in hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness property assets.

The broker highlights that it sees "significant scope for growth with an estimated $218 billion addressable market."

This is expected to support dividends per share of 8.4 cents in FY 2025 and then 8.7 cents per share in FY 2026. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.19, this will mean dividend yields of 7% and 7.3%, respectively.

Bell Potter has a buy rating and $1.50 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that could be a buy is Universal Store. It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.

Bell Potter is bullish on the company and believes it is destined to provide investors with more good dividend yields in the near term.

The broker expects fully franked dividends per share of 32.4 cents in FY 2025 and then 37.2 cents in FY 2026. Based on the current Universal Store share price of $6.99, this will mean yields of 4.6% and 5.3%, respectively.

Bell Potter has a buy rating and $7.80 price target on its shares.

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