If you’re looking to add some dividend shares to your portfolio, then I think the two listed below could be top options.
Here’s why I think these dividend shares are in the buy zone:
National Storage REIT (ASX: NSR)
I think this self storage operator could be a top long term option for income investors. This is due to its strong market position and growth through acquisition strategy. It was partly this strategy that led to the company reporting a 9% increase in underlying earnings to $67.7 million in FY 2020 despite the pandemic.
And while the company is expecting its earnings to be flat at best in FY 2021, I expect its growth to resume once the crisis passes. This year National Storage expects to post earnings of 7.7 cents to 8.3 cents per share and will then pay out 90% to 100% of this to shareholders. Based on the current National Storage share price, the high end implies a 4.5% distribution yield.
Rural Funds Group (ASX: RFF)
Another ASX dividend share I would buy is this agriculture-focused property group. I believe Rural Funds is in a great position to continue growing its distribution at a solid rate over the 2020s. This is because of its high quality portfolio of assets that are spread across several different industries and leased to some of the biggest players in the market.
Another big positive is the long term certainty that Rural Funds’ long leases offer investors. With a weighted average lease expiry of almost 11 years and rental increases built in, Rural Funds appears perfectly positioned to deliver on its target of increasing its distribution by 4% per annum over the long term. This looks very likely to be the case in FY 2021, with management intending to grow its distribution by 4% to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 5% yield.
These 3 stocks could be the next big movers in 2020
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More reading
- Beat ultra low interest rates with these top ASX dividend shares
- 3 ASX dividend shares that have increased their payouts in 2020
- Rural Funds share price rises on FY20 results
- Why I would buy CBA and this top ASX dividend share
- 2 of the best ASX dividend shares to buy next week
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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