2 ASX Dividend Shares with High Yields to Watch

September 02, 2024 03:43 PM AEST | By Team Kalkine Media

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2 ASX Dividend Shares with High Yields to Watch — Image source: shutterstock

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Current term deposit rates may be at their highest in years, but they still fall short compared to the potential returns available from ASX dividend shares. For those open to taking on more risk, shares could present a more rewarding option.

Here are two ASX dividend shares that offer attractive prospective yields and also have the potential for meaningful capital gains:

APA Group (ASX:APA)
APA Group, an energy infrastructure company, owns, manages, and operates a diverse $26 billion portfolio that includes gas, electricity, solar, and wind assets. This portfolio supports very defensive and predictable earnings, with APA currently on track to increase its dividend for the 20th consecutive year. Macquarie analysts have expressed confidence in the company, maintaining an outperform rating and a price target of $8.47 on its shares, which suggests a potential upside of around 12% over the next 12 months.

For income projections, the broker forecasts dividends of 57 cents per share in FY 2025 and 58.5 cents per share in FY 2026. With the current APA Group share price at $7.57, this would result in yields of approximately 7.5% and 7.7%, respectively.

Transurban Group (ASX:TCL)
UBS analysts have highlighted Transurban Group as a standout ASX dividend share. As a major toll road operator, Transurban has a portfolio of key roads across Australia and North America, including the Cross City Tunnel and Eastern Distributor in Sydney, and CityLink and the West Gate Tunnel Project in Melbourne.

The broker noted that Transurban's performance in FY 2024 met expectations and is optimistic about further growth in FY 2025, driven by strong free cash flow generation. UBS currently has a positive rating on Transurban, with a price target of $14.60, indicating potential upside of 8%.

In terms of income, UBS forecasts dividends per share of 65 cents for FY 2025 and 69 cents for FY 2026. Based on the current Transurban share price of $13.55, this would equate to yields of 4.8% and 5.1%, respectively.

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