If you’re looking for a way to beat low interest rates, then the ASX dividend shares listed below would be worth considering.
I believe both dividend shares would be great options for income investors due to their generous yields and strong businesses. Here’s why I would buy them:
BHP Group Ltd (ASX: BHP)
If you’re not averse to investing in the resources sector, then I would suggest you consider buying BHP shares. This is because BHP owns and operates some of the highest quality assets in the world. It also has several growth opportunities, particularly in respect to oil production, that could create value for investors in the future.
Another positive is its low costs and favourable commodity prices. The latter is certainly the case with iron ore, with the steel making ingredient commanding a price of over US$120 a tonne at present. This means BHP’s iron ore operations are generating high levels of free cash flow. The majority of which I expect to be returned to shareholders. So much so, I estimate that BHP’s shares currently provide investors with a fully franked ~5% FY 2021 dividend yield.
National Storage REIT (ASX: NSR)
Another dividend share to consider buying right now is National Storage. I think the self storage operator could be a top long term option for income investors due to its strong market position and growth through acquisition strategy. And although the company is inevitably going to be impacted by the pandemic, I don’t believe it will be as bad as many of its real estate peers.
As a result, I’m optimistic National Storage will be able to continue paying shareholders a decent distribution during over the coming year. Based on the current National Storage share price, I estimate that it offers a 4.4% FY 2021 distribution yield.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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