2 of the best ASX 200 dividend giants to buy in May

If you’re looking for some dividend stocks to buy, then it could be worth considering the ASX 200 dividend giants listed below.

That’s because they have been named as best buys by leading brokers this month. Here’s what they are saying about them:

Woodside Energy Group Ltd (ASX: WDS)

The first ASX 200 dividend giant that could be a top option for income investors is Woodside Energy.

It is of course Australia’s largest energy producer with a world class portfolio of operations and projects.

The team at Morgans believes its shares are cheap at current levels. So much so, the broker recently named them on its best ideas list with an add rating and $36.00 price target. It said:

A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS’s share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions. Increasing our conviction in our call is the progress WDS is making through the current capex phase, while maintaining a healthy balance sheet and healthy dividend profile.

Speaking of dividends, the broker is forecasting fully franked dividends of $1.25 per share in FY 2024 and $1.57 per share in FY 2025. Based on the current Woodside share price of $28.15, this equates to 4.5% and 5.5% dividend yields, respectively.

Woolworths Limited (ASX: WOW)

Another ASX 200 dividend giant that is highly rated by analysts is Woolworths. It is the owner of the eponymous supermarket chain, BWS, and has a growing pet care business.

Goldman Sachs is a very big fan of the company. It currently has its shares on its coveted conviction list with a buy rating and $39.40 price target. The broker feels that Woolworths is undervalued at current levels. It said:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

As for income, the broker is forecasting fully franked dividends per share of $1.08 in FY 2024 and then $1.14 in FY 2025. Based on the current Woolworths share price of $31.13, this equates to dividend yields of 3.5% and 3.7%, respectively.

The post 2 of the best ASX 200 dividend giants to buy in May appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.