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Investors seeking dividend income on the ASX have several attractive options, with three stocks recently highlighted by leading brokers as strong buys. These stocks not only offer potential share price appreciation, but also impressive dividend yields in the near term. Here’s a closer look at APA Group, IPH Ltd, and Telstra Group Ltd, and why brokers believe they could be solid additions to your portfolio.
APA Group (ASX:APA) - A Powerhouse of Energy Infrastructure
APA Group, a dominant player in Australia's energy infrastructure sector, has captured the attention of brokers for its extensive portfolio and future growth potential. Valued at AU$27 billion, APA Group owns and operates a diversified range of gas, electricity, solar, and wind assets across the country. This robust asset base provides the company with a stable and recurring revenue stream, which is a key factor behind its appeal to income-focused investors.
Macquarie, a leading financial services group, has placed an outperform rating on APA Group's shares with a price target of AU$9.40, signaling confidence in the stock’s future performance. The broker is particularly optimistic about the company’s ability to deliver substantial dividends, forecasting payouts of 56 cents per share in FY 2024 and 58 cents in FY 2025. At the current share price of AU$7.89, these dividends translate to attractive yields of 7.1% and 7.35%, respectively. For investors, this suggests that APA Group is not only a solid dividend payer but also offers potential for capital growth.
IPH Ltd (ASX:IPH) - A Defensive Play in Intellectual Property
For those interested in a defensive dividend stock with growth potential, IPH Ltd stands out. As a leading intellectual property (IP) solutions provider, IPH operates across the globe, offering essential services that cater to a diverse range of industries. Its strong market position and consistent performance have made it a favorite among brokers, with Goldman Sachs recently recommending the stock as a buy.
Goldman Sachs has set a price target of AU$8.25 for IPH shares, underpinned by the company’s resilient earnings and capacity for organic growth. The broker expects these factors to support fully franked dividend payments of 37 cents per share in FY 2025 and 40 cents per share in FY 2026. With the current share price at AU$6.48, these dividends represent yields of 5.7% and 6.2%, respectively. This makes IPH Ltd an appealing option for investors seeking a combination of stability and income.
Telstra Group Ltd (ASX:TLS) - A Telecom Giant with Steady Dividends
As Australia's largest telecommunications provider, Telstra Group Ltd is a cornerstone of the ASX, serving millions of customers with a wide range of services. The company’s extensive reach and reliable revenue streams make it a compelling dividend stock, particularly for those seeking steady income.
Goldman Sachs is bullish on Telstra’s prospects, assigning a buy rating with a price target of AU$4.35. The broker anticipates fully franked dividends of 19 cents per share in FY 2025 and 20 cents per share in FY 2026. Based on the current share price of AU$4.03, these dividends offer yields of 4.7% and 5%, respectively. For investors looking for a reliable source of income, Telstra’s strong market position and consistent dividend payments make it a stock worth considering.
