Broker says these ASX 200 dividend stocks are best buys

MotleyFool
01-06

If you are on the lookout for new ASX 200 dividend stocks to buy for your income portfolio, then it could be worth checking out the two listed below that Bell Potter is bullish on.

These stocks currently feature on its coveted Australian equities panel this month. This panel is home to its favoured Australian equities that it believes offer attractive risk-adjusted returns over the long term.

Two ASX dividend stocks that feature on the list at present are as follows:

BHP Group Ltd (ASX: BHP)

The note reveals that the broker is positive on mining giant BHP and sees it as an ASX 200 dividend stock to buy.

Bell Potter likes the Big Australian due to its large exposure to copper and the potential benefits of Chinese economic stimulus, which could be supportive of commodity prices. It explains:

BHP presents an attractive investment proposition, providing exposure to both copper and the potential upside from further Chinese stimulus measures. BHP is one of the top three global producers of copper and has the largest copper endowment of any company globally. BHP operates the Escondida mine in Chile, where they have a 57.5% ownership stake.

As for income, the broker is forecasting a fully franked dividend yield of approximately 5% from BHP's shares in 2025.

Transurban Group (ASX: TCL)

Another ASX 200 dividend stock that Bell Potter has on its Australian equities panel is Transurban.

It is a toll road operator with a collection of important roads across Australia and North American. This includes CityLink in Melbourne, the Eastern Distributor in Sydney, and the Logan Motorway in Brisbane.

Bell Potter likes Transurban as it believes it is well-positioned to benefit from its inflation-linked revenue stream. It also highlights its significant growth pipeline and population growth as reasons to be positive. The broker explains:

We believe the current inflationary environment is favourable for Transurban given its inflation-linked revenue stream with annual escalators. Moreover, TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience.

The group's current pipeline of growth projects is $3.3 billion (TCL's share of total project cost) and further huge development opportunities are expected over the next few decades, supported by population and economic growth.

In respect to dividends, Bell Potter is forecasting a dividend yield of approximately 4.7% from Transurban's shares over the next 12 months.

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