Buy Rio Tinto and these ASX dividend stocks

Apr 11,2024
Buy Rio Tinto and these ASX dividend stocks

The good news for income investors is that there are plenty of quality ASX dividend stocks trading on the Australian share market. But which ones could be in the buy zone?

Three that analysts are tipping as buys this month are listed below. Here's what you need to know about them:

APA Group could be an ASX dividend stock to buy right now. It is an energy infrastructure business that owns, manages, and operates a diverse portfolio of gas, electricity, solar and wind assets.

It has a long track record of dividend increases. In fact, earlier this year the company lifted its interim dividend, marking 19 years of distribution growth.

The team at Macquarie believe this trend will continue and is forecasting further dividend increases. The broker is expecting dividends per share of 56 cents in FY 2024 and 57.5 cents in FY 2025. Based on the current APA Group share price of $8.54, this equates to 6.55% and 6.7% dividend yields, respectively.

Macquarie has an outperform rating and $9.40 price target on the company's shares.

If you're not against investing in the mining sector, then Rio Tinto could be a top ASX dividend stock to buy. It is a leading global mining group that focuses on finding, mining, and processing the Earth's mineral resources. This includes aluminium, copper, iron ore and lithium.

Goldman Sachs thinks investors should be buying the mining giant's shares due to its positive production outlook. It highlights that "Rio is a FCF and production growth story […] with forecast Cu Eq production growth of ~5-6% in 2024 & 2025."

The broker expects this to underpin fully franked dividends per share of US$4.38 (A$6.72) in FY 2024 and then US$4.63 (A$7.10) in FY 2025. Based on the latest Rio Tinto share price of $127.75, this will mean yields of 5.25% and 5.6%, respectively.

Goldman currently has a buy rating and a $140.20 price target on its shares.

Another ASX dividend stock that has been named as a buy for income investors is Super Retail. It is the retail conglomerate behind popular store brands BCF, Macpac, Rebel, and Supercheap Auto.

Goldman Sachs is also feeling very positive about the retailer. Its analysts recently noted that "the 1H24 result was high quality and the strategic growth plan is intact."

Goldman expects this to support fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on the latest Super Retail share price of $15.77, this will mean yields of 4.25% and 4.6%, respectively.

The broker has a buy rating and a $17.80 price target on its shares.