Buy BHP and these ASX dividend shares next week

MotleyFool
08/10

If you're looking to top up your income portfolio, next week could be a good time to take a closer look at some of the ASX's most reliable dividend payers.

These companies offer the potential for steady income, backed by strong market positions and resilient earnings.

Here are three dividend shares that brokers think income investors should consider buying.

BHP Group Ltd (ASX: BHP)

BHP is the one of the world's largest mining companies, producing iron ore, copper, metallurgical coal, and other key commodities. It has long been a favourite among dividend investors thanks to its strong balance sheet, low-cost operations, and disciplined capital management.

While commodity prices can be volatile, BHP's scale and efficiency allow it to generate significant cash flow through the cycle.

Morgan Stanley expects this to continue and is forecasting fully franked dividends of approximately $1.59 per share in FY 2025 and then $1.58 per share in FY 2026. Based on its current share price of $40.21, this equates to dividend yields of 4% and 3.9%, respectively.

The broker currently has an overweight rating and $43.50 price target on its shares.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be a buy is Rural Funds Group. It is a real estate investment trust (REIT) specialising in agricultural assets such as almond orchards, vineyards, cropping land, and cattle properties. These properties are leased to high-quality operators on long-term agreements, providing predictable rental income.

The trust aims to grow its distributions over time by acquiring and improving properties, while also benefiting from inflation-linked rental increases. With Australia's agricultural sector enjoying strong long-term demand drivers, Rural Funds offers a way to tap into that growth while collecting regular income.

Bell Potter believes the company is positioned to pay dividends per share of 11.7 cents in FY 2025 and then 12.2 cents in FY 2026. This equates to dividend yields of 6.3% and 6.6%, respectively.

The broker also sees plenty of upside for investors with its buy rating and $2.45 price target.

Telstra Group Ltd (ASX: TLS)

Finally, Telstra could be a third ASX dividend share to buy next week. it is Australia's largest telecommunications provider, with a dominant mobile network, strong brand, and millions of loyal customers. Its reliable earnings base makes it a popular choice for income-focused investors.

In addition, the company's simplified structure, cost-cutting initiatives, and 5G network rollout have strengthened its position in the market. This leaves it well placed to grow its dividend over the next decade.

Macquarie is a fan of the company and is expecting some attractive dividend yields in the near term. It has pencilled in fully franked dividends per share of 18.5 cents in FY 2025 and then 19 cents in FY 2026. Based on its current share price, this would mean dividend yields of 3.7% and 3.8%, respectively.

The broker has an outperform rating and $5.19 price target on its shares.

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