Coles Group Ltd (ASX:COL) and this ASX dividend share have been given buy ratings. Here’s what you have to know about them…
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With interest rates likely to remain low for some time to come, the dividend shares listed below could be top options for anyone seeking a passive income stream.
Here’s why these dividend shares are rated as buys:
Coles Group Ltd (ASX: COL)
This supermarket operator could be a good option for investors. Particularly given the weakness in the Coles share price in 2021.
Since the start of the year, the company’s shares have lost 12% of their value. This compares to a 5% gain by the ASX 200 over the same period.
One broker that sees this as a buying opportunity is Goldman Sachs. Earlier this week the broker responded to Coles’ third quarter update by retaining its buy rating and trimming its price target slightly to $20.50.
Goldman is also forecasting dividends per share of 62 cents in FY 2021 and 66 cents in FY 2021. Based on the current Coles share price of $16.34, this will mean fully franked yields of 3.8% and 4%, respectively, over the next two years.
Sonic Healthcare Limited (ASX: SHL)
Another ASX dividend share to look at is Sonic Healthcare. It is a global healthcare provider with specialist operations in laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine, and corporate medical services.
Sonic has been performing very positively in FY 2021. While this has been driven largely by COVID testing globally, the rest of the business has been on form as well.
Positively, COVID testing isn’t going anywhere soon, even with vaccines rolling out. As a result, Sonic looks well-placed to continue its strong growth into FY 2022.
Credit Suisse expects this to be the case and has put an outperform rating and $40.00 price target on its shares.
It is also forecasting partially franked dividends of 93 cents per share in FY 2021 and 97 cents per share dividend in FY 2022. Based on the current Sonic Healthcare share price of $35.77, this will mean yields of 2.6% and 2.7%, respectively.
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Returns As of 15th February 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.