3 top ASX dividend stocks that brokers love

MotleyFool
02-25

Income investors have plenty of options when it comes to the Australian share market.

The ASX is renowned for its attractive dividend-paying stocks, making it a great hunting ground for those seeking passive income.

But which stocks could be top picks right now? Here are three ASX dividend stocks that brokers are backing:

National Storage REIT (ASX: NSR)

Analysts at Citi believe National Storage is a top pick for income investors.

As one of the leading self-storage providers in Australia and New Zealand, National Storage operates over 230 centres, catering to more than 90,000 residential and commercial customers with tailored storage solutions.

Citi currently has a buy rating on the stock with a price target of $2.70.

In terms of income, Citi expects dividends per share of 11.3 cents in FY 2025 and then 11.9 cents in FY 2026. Based on the current share price of $2.23, this implies dividend yields of 5.1% and 5.3%, respectively.

Regal Partners Ltd (ASX: RPL)

Investment company Regal Partners is another top ASX dividend stock that has caught the attention of brokers.

Bell Potter sees strong potential in the alternative asset manager and has placed a buy rating on the stock with a price target of $4.85.

In respect to dividends, Bell Potter is forecasting fully franked payouts of 14.6 cents per share in FY 2024 and then 18.1 cents per share in FY 2025. Based on its current share price of $3.62, this equates to dividend yields of 4% and 5%, respectively.

Rio Tinto Ltd (ASX: RIO)

Mining giant Rio Tinto is a third top ASX dividend stock that is highly regarded by analysts.

Goldman Sachs sees a lot of value in Rio Tinto's shares, citing its attractive valuation, robust free cash flow, and generous dividend yield. A key driver of this outlook is Rio's exposure to commodities such as copper and aluminium, which the broker expects to contribute significantly to earnings in the coming years.

Goldman Sachs highlights Rio Tinto's projected free cash flow and dividend yield, forecasting a "FCF/dividend yield in 2025E (c. 5%/5% yield) & 2026E (c. 7%/6% yield) driven by our bullish view on aluminium and copper (~45-50% of group EBITDA by 2026E)."

The broker expects this to underpin fully franked dividends of US$4.30 (A$6.77) per share in FY 2025 and US$4.31 (A$6.79) per share in FY 2026. Based on the current Rio Tinto share price of $119.21, this would mean dividend yields of 5.65% and 5.7%, respectively.

Goldman Sachs has a buy rating on Rio Tinto with a price target of $143.70.

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