Buy BHP, Telstra, and this ASX dividend share

MotleyFool
05-23

There are a lot of options for income investors to choose from on the Australian share market.

To narrow things down, let's take a look at three ASX dividend shares that brokers are bullish on at present. They are as follows:

BHP Group Ltd (ASX: BHP)

Goldman Sachs has named mining giant BHP as an ASX dividend share to buy.

It likes BHP due to its exposure to copper, its superior free cash flow generation, and the below average multiples its shares trade on. The broker highlights that "BHP is currently trading at ~0.8x NAV and ~6x NTM EBITDA, below the 25-yr average EV/EBITDA of 6.5-7x."

In addition, it notes that "over the last 10 years, BHP has traded at a ~0.5x premium to global mining peers." It believes "this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers)."

Goldman expects this to support the payment of fully franked dividends per share of ~A$1.56 in FY 2025 and then ~A$1.45 in FY 2026. Based on the current BHP share price of $38.63, this would mean dividend yields of 4% and 3.7%, respectively.

The broker has a buy rating and $45.10 price target on its shares.

Centuria Industrial REIT (ASX: CIP)

Another ASX dividend share that is rated as a buy is Centuria Industrial REIT.

It is a pure-play industrial property trust that owns a high-quality portfolio of warehouses, logistics hubs, and distribution centres across Australia.

Bell Potter thinks that "CIP presents a strong risk-adjusted opportunity where other asset classes have question marks." It highlights that its "strong fundamentals and a good bal sheet should allow CIP to grow as it captures existing portfolio value in time."

As for income, the broker is forecasting dividends per share of 16.3 cents in FY 2025 and then 16.8 cents in FY 2026. Based on its current share price of $3.07, this equates to dividend yields of 5.3% and 5.5%, respectively.

Bell Potter has a buy rating and $3.35 price target on its shares.

Telstra Group Ltd (ASX: TLS)

Finally, telco giant Telstra could be an ASX dividend share to buy.

That's the view of Goldman Sachs, which is feeling very positive on the telco giant's outlook.

Its analysts highlight that they "believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive."

The broker expects this to support fully franked dividends of 19 cents per share in FY 2025 and then 20 cents per share in FY 2026. Based on its current share price of $4.71, this would mean dividend yields of 4% and 4.25%, respectively.

Goldman Sachs has a buy rating and $4.90 price target on its shares.

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