Buy Westpac and these ASX 200 dividend shares

MotleyFool
01-21

If you're planning to make some additions to your income portfolio in January, it could be worth paying attention to what analysts are saying.

Listed below are three ASX 200 dividend shares that were recently rated as buys, with attractive dividend yields that could enhance your passive income potential.

Here's what you need to know about them:

Elders Ltd (ASX: ELD)

Agribusiness company Elders has caught the attention of analysts at Bell Potter, who see it as a top pick for income investors. The broker is particularly optimistic about Elders' recent acquisition, which it believes offers underestimated synergy opportunities. Bell Potter notes:

The acquisition of Delta looks like a relatively low-risk step-out with upside to the synergy target based on the 15% ROIC target. Trading at ~7.4x FY25e EBITDA, ELD trades at a reasonable discount to its through-the-cycle EBITDA multiple of 8.5x.

In terms of income, Bell Potter expects Elders to pay fully franked dividends of 38 cents per share in FY 2025 and 43 cents per share in FY 2026. With the current Elders share price at $7.07, this represents dividend yields of 5.4% and 6.1%, respectively.

The broker has a buy rating and a price target of $9.45 on Elders shares.

Endeavour Group Ltd (ASX: EDV)

Next on the list is Endeavour Group, which is the owner of Australia's largest drinks retail network. This includes Dan Murphy's and BWS, as well as a substantial portfolio of licensed hotels.

Analysts at Goldman Sachs like this ASX 200 dividend share for its resilience during challenging market conditions. They note:

We continue to see Endeavour as a high-quality retailer gaining share amid a category down-cycle, with resilient growth opportunities in Hotels.

Its analysts also highlight that the company is trading at an attractive valuation of 17x FY25 earnings, compared to its historical average of 22x, potentially making it a cheap buy.

As for dividends, Goldman forecasts fully franked dividends of 20 cents per share in FY 2025 and 22 cents per share in FY 2026. Based on its current share price of $4.18, this means dividend yields of 4.8% and 5.25%.

The broker has a buy rating and a price target of $5.50 on Endeavour shares.

Westpac Banking Corp (ASX: WBC)

Finally, Westpac, Australia's oldest bank, is another ASX 200 dividend share analysts are bullish on. UBS believes Westpac is well-positioned to deliver better-than-expected results in FY 2025.

Despite this optimism, Westpac shares are trading at a significant discount compared to its major banking peers, providing a potential buying opportunity for investors.

UBS expects fully franked dividend yields just below 5% for FY 2025 and FY 2026 at current prices.

The broker has a buy rating and price target of $37.00 on Westpac shares.

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