Are you looking for a source of income in this low interest rate environment? Then check out the two ASX shares listed below.
Both offer investors generous dividend yields that smash the interest rates on offer with term deposits. Here’s why I like them:
Aventus Group (ASX: AVN)
The first ASX dividend share I would suggest income investors consider buying is Aventus. The retail property company’s shares have come under significant pressure this year because of the pandemic. However, I believe this selloff has been largely unwarranted due to its focus on large format retail parks and its reasonably high rental income weighting towards everyday needs.
For example, this morning Aventus released its full year results and revealed a 4.2% increase in funds from operations (FFO) to $100 million. It also reported solid rent collection of 87% through the COVID-19 period and a high occupancy rate of 98%. This is thanks to its blue chip tenant base which includes the likes of The Good Guys, ALDI, Bunnings, and Harvey Norman Holdings Limited (ASX: HVN). It also declared total distributions of 11.9 cents per security in FY 2020. Based on the current Aventus share price, this equates to a generous 5.3% yield.
BHP Group Ltd (ASX: BHP)
Another dividend share to consider buying is BHP. I believe the mining giant would be a great addition for investors that are not averse to investing in the resources sector. As well as offering a portfolio some added diversity, I believe it also provides solid potential returns for investors over the coming years.
This is thanks to BHP’s world class operations, its low costs, favourable commodity prices, and growth opportunities. In respect to commodity prices, the iron ore price is currently trading beyond US$120 a tonne. At this level BHP is generating material free cash flows from its Pilbara iron ore operations. This should put it in a position to deliver another generous dividend payment in FY 2021. Based on the current BHP share price, I estimate that it offers a forward fully franked ~5% dividend yield.
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More reading
- The latest ASX stocks that brokers just upgraded to “buy”
- What are dividend shares and how do you find them?
- Aventus share price wobbles despite solid FY20 results
- Here are the highlights of this ASX reporting season
- ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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