2 ASX dividend shares with 40% to 120% upside

Are you hunting for ASX dividend shares with the potential to deliver big returns?

If you are, then take a look at the two in this article that Bell Potter is recommending to clients.

Here's what the broker is saying about them:

Jumbo Interactive Ltd (ASX: JIN)

Bell Potter thinks that online lottery ticket seller Jumbo Interactive could be an ASX dividend share to buy.

This morning, the broker has upgraded its shares to a buy rating with an $8.00 price target (from $7.20). Based on its current share price of $5.77, this implies potential upside of almost 40% for investors.

Commenting on its upgrade, Bell Potter said:

We continue to see risk to JIN's market share as TLC strengthens its digital offering, while the upcoming renewal of the TLC reseller agreement presents a near-term overhang. However, our probability-weighted scenario analysis suggests the risk/reward profile is skewed favourably despite these risks, leading us to upgrade our recommendation from Hold to Buy. 

Given prevailing market sentiment, we see the reseller agreement renewal as a potential positive catalyst. We continue to view regulatory and tax developments as key risks to the Dream businesses and our forecasts. JIN trades on 3.9x FY27e EBITDA.

As for income, the broker is forecasting fully franked dividends of 26 cents per share in FY 2027 and 30 cents per share in FY 2028. This represents dividend yields of 4.5% and 5.2%, respectively.

Regal Partners Ltd (ASX: RPL)

Another ASX dividend share that has been given the thumbs up by Bell Potter is asset manager Regal Partners.

The broker has retained its buy rating on Regal Partners' shares with a trimmed price target of $4.50 (from $4.80) this morning. Based on its current share price of $2.05, this implies potential upside of approximately 120%.

Speaking about the stock, the broker said:

The base business is running at a pre-tax profit of $62m. That sees it valued around 11x earnings, stripping the per-share value of the cash and seed capital out of the share price (nil debt excluding leases) to get an implied TTC number with no performance fees. This is more than fair based on the track record, earnings leverage and proven net inflows of more than $2.0bn across nine months, in line with ambitions. 

However, RPL has de-rated from around 9x to 7x earnings, a steeper contraction than peers, from 18x to 15x. Maintain Buy. Regal is understood to have sold part of its stake in Firmus, de-risking the next valuation mark if this is captured in the share price.

Bell Potter is forecasting some big dividend yields in the near term. It expects fully franked dividends of 19 cents per share in FY 2026 and then 20 cents per share in FY 2027. This represents dividend yields of 9.3% and 9.75%, respectively.

The post 2 ASX dividend shares with 40% to 120% upside appeared first on The Motley Fool Australia.

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

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