ASX-listed companies Telstra Corporation (AU:TLS) and Suncorp Group (AU:SUN) have been rated “Strong Buy” by analysts. In addition to that, these stocks have also earned a “Perfect 10” score on the TipRanks Smart Score tool, which indicates their potential to outperform the market returns.
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The icing on the cake is the higher dividend yields, which make them the right choice for investors looking for passive income.
Now, let’s delve into some of the details.
Telstra Corporation Limited
Telstra is a telecommunications company based in Australia that provides a comprehensive selection of communication and technology services.
Telstra is renowned for its tradition of distributing attractive dividends, making it a popular choice among retirees seeking dividend shares in the ASX market. In 2022, the company paid a total dividend of AU$0.17 per share. Analysts predict dividends of AU$0.17 per share for 2023, and they could go up to AU$0.18 per share in 2024.
Goldman Sachs also forecasted AU$0.20 per share in dividends for 2025. Three days ago, analyst Kane Hannan from Goldman Sachs reiterated his Buy rating on the stock, predicting an upside of 8.3% in the share price.
According to the broker, the Australian telecommunications sector rebounded with an increase in revenue during the first half of FY 2023, following a prolonged period of lower revenues. Hannan believes Telstra is well-placed in this scenario with higher mobile revenues and cost-saving programs.
What is Telstra’s Stock Price Target?
According to TipRanks’ consensus forecast, TLS stock has a Strong Buy rating, based on six Buy versus one Hold recommendations.
At an average target price of AU$4.63, analysts suggest a growth of 6.75% on the current price.
Suncorp Group Limited
Suncorp Group, a prominent financial services firm, provides a diverse array of insurance and banking solutions throughout Australia and New Zealand, ranking among the largest in the industry.
In March, the stock was caught up in the panic selling in the banking sector, and it touched a low point of AU$11.6. Since then, analysts have seen this as a buying opportunity for investors.
Goldman Sachs is bullish on the overall favorable outlook of the company and the industry-based factors supporting it. The broker commented, “We are favorably disposed to Suncorp, noting in large part the tailwinds that exist in the general insurance market, i.e., very strong renewal premium rate increases and the benefit of higher investment yields.” It was also said that Suncorp is well-placed to offset the margin pressures through price increases.
According to Goldman’s forecast, the fully franked dividends are expected to be 78 cents per share in 2023 and then increase to 79 cents per share in 2024.
Three months ago, Goldman reiterated their Buy rating on the stock. The broker predicts an upside of 16.6% from the current share price.
Is Suncorp a Good Share to Buy?
Based on eight buy ratings, SUN stock has a Strong Buy rating on TipRanks. The average target price is AU$14.17, implying a change of 14.19% from the current price level.
Conclusion
While the upside potential for these two ASX shares is limited, analysts are optimistic about Telstra and Suncorp, which could be suitable options for investors seeking healthy dividends.
