Investing in dividend shares can be a powerful strategy for building long-term wealth, particularly when focusing on Australian companies with the potential for substantial payout growth. Two such shares, Accent Group Ltd and Coles Group Ltd, have been highlighted by analysts as promising candidates for a buy-and-hold approach.
Accent Group Ltd: Footwear Retailer with Growth Potential
Accent Group Ltd (ASX: AX1) stands out as a top contender for investors seeking robust dividend yields. As a leading footwear retailer, Accent Group boasts a portfolio of well-known brands, including Platypus, Style Runner, and Hype DC. Additionally, it holds exclusive distribution rights for major global brands in the region, enhancing its market presence.
According to Bell Potter, a recent dip in Accent Group’s share price presents a lucrative opportunity for investors. The brokerage firm has expressed optimism about the company’s future, stating:
In the near term, we expect monetary policy catalysts to drive recovery in the lifestyle segment from 2Q26e, while in the medium-long term, we see a higher growth focus for AX1 leveraging the outperforming sports segment via dominant global partner and key shareholder, FRAS.
With plans to open the first Sports Direct store in mid-November, Accent Group aims to capitalize on a significant store roll-out opportunity across Australia, targeting 50 stores over six years. This expansion is expected to strengthen its partnerships with leading brands like Nike, supported by its key shareholder, FRAS.
Bell Potter projects fully franked dividends of 7.8 cents in FY 2026 and 9.2 cents in FY 2027. With the current share price at $1.32, these dividends translate to yields of 5.9% and 7%, respectively. The brokerage has set a buy rating and a price target of $1.80 for Accent Group’s shares.
Coles Group Ltd: A Reliable Dividend Payer
Coles Group Ltd (ASX: COL), one of Australia’s leading supermarket operators, is another attractive option for dividend investors. Known for its defensive business model, Coles consistently generates earnings across various economic cycles, making it a dependable dividend payer.
Bell Potter has recently upgraded its outlook on Coles, citing several factors for its favorable view:
NPAT forecasts are unchanged in FY26e and -3% in FY27e. Our target price lifts to $24.30ps (prev. $22.10ps) principally on model roll forward and lower net debt. Upgrade to Buy (from Hold). Continued delivery against ‘Simplify & Save’ initiatives ($565m delivered to date vs. a target of $1Bn by FY27e), generating a return on ADC/CFC investments (~$1.45Bn investment and $103m of start-up costs in FY25) and a strengthening consumer backdrop are all reasons for a more favourable view.
For income-focused investors, Coles offers fully franked dividends of 71 cents per share in FY 2026 and 74 cents per share in FY 2027. With its current share price at $23.31, these dividends equate to yields of 3% and 3.2%, respectively. Bell Potter’s buy rating comes with a price target of $24.30 on Coles shares.
Market Context and Future Prospects
The recommendation to invest in Accent Group and Coles Group comes amid a broader market environment where investors are increasingly seeking stable income sources. With global economic uncertainties and fluctuating interest rates, dividend shares offer a compelling alternative to traditional fixed-income investments.
Historically, companies like Coles, with their robust business models and consistent earnings, have been favored by investors during economic downturns. Similarly, Accent Group’s strategic partnerships and expansion plans position it well for future growth, particularly in the thriving sports retail segment.
Looking ahead, both companies are poised to benefit from their strategic initiatives and market positioning. As they continue to deliver on their growth and efficiency targets, investors can expect sustained dividend payouts and potential capital appreciation.
In conclusion, for those seeking to enhance their investment portfolios with reliable income streams, Accent Group and Coles Group represent promising opportunities. Their strong market positions, coupled with positive analyst outlooks, make them worthy considerations for a long-term buy-and-hold strategy.
