Tuesday, June 18, 2024

2 ASX dividend stocks to buy in June

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With a new month on the horizon, what better time to consider making some new additions to your income portfolio.

But which ASX dividend stocks could be buys in June? Let’s take a look at two that analysts are bullish on right now. Here’s what they are saying about these income options:

Cedar Woods Properties Limited (ASX: CWP)

The team at Morgans thinks income investors should be buying this ASX dividend stock in June. It currently has the property company on its best ideas list with an add rating and $5.60 price target on its shares.

In respect to dividends, the broker has pencilled in dividends per share of 18 cents in FY 2024 and then 20 cents in FY 2025. Based on the current Cedar Woods Properties share price of $4.46, this will mean dividend yields of 4% and 4.5%, respectively.

Morgans thinks that the company’s shares are cheap and deserve to trade on higher multiples. Particularly given its improving outlook. It said:

CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP’s exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.

Challenger Ltd (ASX: CGF)

Over at Goldman Sachs, its analysts think that this annuities company could be an ASX dividend stock to buy. The broker currently has a buy rating and $7.50 price target on its shares.

As for income, the broker is forecasting fully franked dividends of 26 cents per share in FY 2024, 27 cents per share in FY 2025, and then 28 cents per share in FY 2026. Based on the current Challenger share price of $6.62, this will mean dividend yields of 3.9%, 4.1%, and 4.2%, respectively.

Commenting on its bullish view, the broker said:

CGF is Australia’s largest retail and institutional annuity provider across Term and Lifetime annuities with a funds management business. We are Buy rated on the stock. We like CGF because: 1) it has exposure to the growing superannuation market across Life and Funds Management; 2) higher yields should drive a favorable sales environment for retail annuities as well as an improvement in margins; 3) its annuity book growth looks well supported through a diversified distribution strategy.

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