Analysts name 2 top ASX 200 dividend shares to buy

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their ASX shares on the laptop in front of them

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their ASX shares on the laptop in front of them

If you’re looking for income, then the ASX 200 could be a great place to start. The benchmark index is filled with quality companies that share a good portion of their profits with shareholders.

Two that have been tipped as buys recently are listed below. Here’s what you need to know about these dividend shares:

South32 Ltd (ASX: S32)

The first ASX 200 dividend share to consider is South32. It is a diversified mining and metals company producing alumina, aluminium, bauxite, copper, energy and metallurgical coal, lead, manganese, nickel, silver, and zinc.

Thanks to strong demand and favourable prices for its products, analysts are tipping South32 to generate significant free cash flow over the coming years.

So much so, the team at Citi is forecasting very big dividends in the coming years. For example, it expects a 38 cents per share dividend in FY 2022 and then a 40 cents per share dividend in FY 2023. Based on the current South32 share price, this will mean yields of over 10% in both years.

Citi has a buy rating and $5.50 price target on the company’s shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share to consider is Telstra. Thanks to the successful execution of its T22 strategy and the upcoming T25 strategy, it is expecting to return to growth at long last in the near future.

For example, Telstra’s CEO, Andrew Penn, highlighted that T22 was based on transforming the company, whereas T25 will be about driving growth. He is targeting high-teens underlying earnings per share compound annual growth rates from FY 2021 to FY 2025.

Morgans remains positive on Telstra and continues to forecast fully franked 16 cents per share dividends in FY 2022 and FY 2023. Based on the latest Telstra share price, this will mean 4% yields for investors.

The broker also sees plenty of upside for its shares with its add rating and a $4.56 price target.

The post Analysts name 2 top ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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