Are you searching for dividend stocks on the ASX to enhance your income portfolio this month? If so, Bell Potter has identified two key options that may be worth your attention.
Below are the reasons why the brokerage firm believes these stocks are some of the best buys on the Australian market today:
Nickel Industries Ltd (ASX: NIC)
For investors open to the mining sector, nickel producer Nickel Industries stands out as a potential ASX dividend stock to add to your portfolio.
Bell Potter analysts consider the company’s shares undervalued, especially in light of its strong growth prospects and appealing dividend yield. They commented:
“Nickel Industries is the only large-scale, pure-play nickel producer on the ASX, offering exposure to nickel prices with earnings diversified between Type 1 and Type 2 nickel. Its aggressive growth strategy is fully funded, and the company is nearing the end of its peak capital expenditure phase, which we expect will drive substantial earnings growth in 2025 and 2026. With long-life assets and a demonstrated ability to perform across the nickel price cycle, the company also maintains a solid (unfranked) dividend, which we forecast to increase. At current levels, the stock trades on very attractive valuation multiples.”
Bell Potter forecasts dividends of 5 cents per share for FY 2024 and FY 2025. With the stock priced at 76 cents, this implies a dividend yield of 6.6%.
The brokerage has issued a “buy” rating for Nickel Industries, setting a price target of $1.47 per share.
Transurban Group (ASX: TCL)
Another dividend stock on Bell Potter’s radar is toll road operator Transurban, which offers stable, low-risk cash flows and significant growth potential.
The broker highlights the company’s favorable position in the current economic climate:
“We believe that Transurban is well-positioned in today’s inflationary environment due to its inflation-linked revenue model with annual price escalations. Additionally, the company provides long-term, low-risk cash flows, backed by concessions that extend over 30 years, and resilient traffic and income levels. Transurban’s growth pipeline is substantial, with a current project share of $3.3 billion and further massive development opportunities anticipated in the coming decades, driven by population and economic growth.”
Bell Potter projects dividends of 65 cents per share in FY 2025 and 72 cents per share in FY 2026. With a current share price of $13.67, this equates to dividend yields of 4.75% and 5.25%, respectively.
The broker has also issued a “buy” rating for Transurban, with a price target of $14.20.
Should You Buy Nickel Industries Ltd Now?
Before making any decisions on Nickel Industries shares, it’s worth considering other expert opinions. For example, Motley Fool’s Scott Phillips has recently shared what he believes are the top five stocks for investors to buy right now – and Nickel Industries didn’t make the list.
Phillips, who has been running Motley Fool’s Share Advisor service for over a decade, has consistently provided stock picks that have achieved impressive returns for thousands of paying members. At present, he believes there are five other stocks that may offer even better investment opportunities.
