2 ASX dividend shares to buy this month: experts

ASX dividend shares can be a great source of returns because of how they can both deliver passive income and capital growth. Experts have made compelling predictions for two S&P/ASX 300 Index (ASX: XKO) shares which could mean good medium-term returns.

The lesser-known businesses are just as capable of producing a 10% return as the most well-known blue-chips or ASX shares.

Both of the companies that I'm about to cover have been rated as buys by the broker UBS. Let's take a look at how much passive income they could produce.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a franchisee business that operates KFC restaurants in Australia, the Netherlands and Germany. The company had a difficult period during the high cost of living as its expenses increased and its customer demand suffered.

UBS rates it as a buy with a price target of $9.75.

The recent FY25 result's net profit after tax (NPAT) was 22% better than what UBS was expecting. That was because the European business held up "materially better than feared" and the Australian KFC operating profit (EBITDA) margin in the second half of FY25 was stronger than expected thanks to cost deflation (chicken and potatoes) and the start of productivity improvements. Those tailwinds only flowed through in the fourth quarter of FY25, so there could be further improvements in FY26.

UBS is currently forecasting 14% net profit growth in FY26 for the ASX dividend share, though UBS thinks it could do better than that those improvements continue, interest rate cuts boost demand as well as other benefits. The broker is predicting earnings per share (EPS) could rise at a compound annual growth rate (CAGR) of 20% in the next three years.

The broker is projecting the ASX 300 share could pay an annual dividend per share of 27 cents in FY26 and 33 cents in FY27. That would translate into future grossed-up dividend yields, including franking credits, of 4% and around 5%, respectively.

Ampol Ltd (ASX: ALD)

UBS describes Ampol as one of the leading transport fuel marketers and convenience store operators in the country. The broker said its operations are focused on procurement, refining, distribution and marketing of fuels, lubricants and a range of specialty products. It owns and operates the Lytton refinery in Queensland and has a retail convenience store presence at its service station sites.

The broker rates Ampol shares as a buy, with a price target of $31.50.

After seeing the quarterly update for the three months to June 2025, UBS said the company was finding ways to grow operating profit (EBIT) despite softer fuel volumes. Its refining margin was stronger than expected, despite a volatile period in crude oil pricing.

The convenience retail business generated modest operating profit growth year over year, thanks to a strong rebound in retail fuel margins over April and May, a stronger premium fuel mix and consistent shop income despite what UBS believes as continued pressure from declining tobacco sales.

UBS is forecasting the ASX dividend share's convenience retail EBIT to grow at a CAGR of 6% over the next three years.

The broker is expecting the rollout of U-Go can drive labour cost savings that "allow for a discounted fuel offer to drive fuel volume growth and improve profitability across the weaker sites in the network."

Additionally, company is expecting the acquisition of EG Australia to boost scale and unlock synergies.

UBS is currently predicting that Ampol could pay an annual dividend per share of $1.53 in FY26 and $1.72 in FY27. This would translate into grossed-up dividend yields, including franking credits of 7.5% and 8.4%, respectively.

The post 2 ASX dividend shares to buy this month: experts appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2025