These cheap ASX dividend shares could rise 20% to 30%

Income investors have a lot of options to choose from on the Australian share market.

To narrow things down, let’s take a look at two ASX dividend shares that Bell Potter is bullish on and believes could rise 20% to 30% from current levels.

Here’s what the broker is recommending to clients:

Rural Funds Group (ASX: RFF)

Bell Potter thinks this agricultural property company’s shares are undervalued at current levels.

However, the broker sees opportunities to unlock value, which could cause a re-rating of its shares. It explains:

The ~35% discount to market NAV is well above the historical average 5% premium since listing. Counterparty profitability indicators have been improving and farm asset values have been resilient, which would suggest that the underearning on unleased assets is the largest performance drain.

Exiting or leasing these assets (combined value ~$387m) would result in reasonable AFFO accretion (14-18% on FY26e PF AFFO) with the scope to also reduce gearing, with this likely to be the greatest share price catalyst. We would expect execution against asset sales to emerge in CY26e.

Bell Potter has a buy rating and $2.50 price target on its shares. This implies potential upside of 20% for investors from current levels.

The broker also expects a 5.65% dividend yield from Rural Funds in FY 2026.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that the broker is bullish on is Universal Store.

It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.

The broker thinks that the company’s shares are undervalued based on its positive growth outlook. This is expected to be underpinned by an expansion in its private label product penetration and its leading position in youth fashion. It explains:

At ~18x FY26e P/E (BPe), we see UNI trading at a discount to the ASX300 peer group and see the multiple justified by the distinctive growth traits supporting consistent outperformance in a challenging broader category, longer term opportunity with three brands, organic gross margin expansion via private label product penetration (currently ~55%) and management execution. We continue to see the youth customer prioritising on-trend streetwear and expect UNI to benefit with their leading position.

Bell Potter has a buy rating and $10.50 price target on its shares. This implies potential upside of approximately 30% for investors.

In addition, a fully franked 4.5% dividend yield is expected by the broker in FY 2026.

The post These cheap ASX dividend shares could rise 20% to 30% appeared first on The Motley Fool Australia.

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