Are these ASX 200 dividend shares must-buys for passive income investors?

If you’re looking for ASX dividend shares to buy, then it could be worth looking at the two listed below.

Both have recently been named as best buys by brokers and tipped to provide attractive yields. Here’s why they believe they could be must-buys for passive income investors:

Telstra Corporation Ltd (ASX: TLS)

The first ASX 200 dividend share that could be a must-buy right now is telco giant Telstra.

That’s the view of analysts at Morgans, which have put the company’s shares on their best ideas list again this month. The broker sees strong earnings momentum and the potential for value to be unlocked from asset divestments. It commented:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

In respect to dividends, Morgans is expecting fully franked dividends of 17 cents per share in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.27, this equates to yields of 4%.

The broker also sees decent upside for its shares. It currently has an add rating and $4.70 price target on them.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that could be a must-buy right now is Westpac.

Analysts at Goldman Sachs are very bullish on the banking giant and have it on their coveted conviction list. The broker believes the company is well-placed for earnings and dividend growth thanks to rising rates and cost reductions. It commented:

We are Buy-rated (on CL) and continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) despite WBC revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment with a 9% step down in costs expected over the next two years, iii) the business is still investing effectively in its franchise, and iv) we note the stock is trading at a notable discount to peers, versus the historical average discount of 2%.

As for dividends, Goldman is forecasting fully franked dividends of 147 cents per share in FY 2023 and 156 cents per share in FY 2024. Based on the current Westpac share price of $21.77, this will mean yields of 6.75% and 7.15%, respectively.

Goldman Sachs has a conviction buy rating and $27.74 price target on its shares.

The post Are these ASX 200 dividend shares must-buys for passive income investors? appeared first on The Motley Fool Australia.

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• Big Wednesday: 12 ASX 200 stocks cracking new 52-week highs
• Morgans names the best ASX 200 dividend shares to buy in April

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Telstra Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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