2 unstoppable ASX dividend shares to buy if there's a stock market sell-off

MotleyFool
01-09

I'm optimistic that the Australian share market will continue its ascent in 2025.

But if a market sell-off were to occur, rather than being fearful, I think income investors should be greedy and pick up some unstoppable ASX dividend shares while they are cheap.

Two shares that analysts are tipping as buys and could be even more attractive in the event of a sell-off are listed below. Here's what you need to know about them:

Coles Group Ltd (ASX: COL)

Supermarket giant Coles could be a great ASX dividend share to buy if there were a market sell-off.

Bell Potter is very positive on the company and currently has a buy rating and $20.50 price target on its shares.

Its analysts believe that the company is well-placed for solid underlying earnings growth in the coming years. It explains:

We see FY25e as a year of consolidation on a reported basis, however, we continue to see COL as providing an attractive earnings growth profile through to FY27e on an underlying basis driven by: (1) delivering $1Bn in cumulative savings by FY27e through Simplify & Save ($238m of which was delivered in FY24) (2) Sustained benefit of lower loss rates (+44bp margin tailwind YOY in 2H24); (3) Delivering targeted returns on a ~$1.45Bn capital investment program in ADC's and CFC's; and (4) Expansion of the store network at a pace consistent with population growth.

And while its dividend yield isn't the largest you will find on the market, it would become far more attractive if there were a sell-off. Bell Potter is forecasting fully franked dividends per share of 68 cents in FY 2025 and 78 cents in FY 2026. Based on its current share price of $19.10, this equates to dividend yields of 3.6% and 4.1%, respectively.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX dividend share that could be a top buy in the event of a market selloff is Lovisa. It is a fashion jewellery retailer with a rapidly growing global store footprint.

Morgans sees it as a great option and has an add rating and $36.50 price target on its shares. It recently highlighted how Lovisa has the potential to become a true global brand. It said:

Lovisa has proven it can successfully build out its unique brand in many diverse territories around the world on its journey to becoming a truly global brand. It's at times like these that investors should be getting set to reap the rewards of this strategy over the longer term.

Lovisa provides investors with a handy dividend yield that would become significantly more attractive if there were a market sell-off. Morgans estimates that it will pay partially franked dividends of 71 cents in FY 2025 and then 79 cents in FY 2026. Based on the current Lovisa share price of $29.89, this equates to dividend yields of 2.4% and 2.65%, respectively.

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