It looks as though interest rates are going to remain at their low levels for several years. As a result, I continue to believe ASX dividend shares are the best place to earn a passive income right now.
But which ASX dividend shares are in the buy zone? I think these two would be top options:
Aventus Group (ASX: AVN)
The first ASX dividend share I think investors ought to buy is Aventus. It is a retail property company which specialises in large format retail parks. Aventus currently operates a total of 20 centres, which are home to a diverse tenant base of 593 tenancies. Among its tenants are major retailers such as ALDI, Bunnings, and The Good Guys.
Thanks to its high weighting to major retailers and every day needs, Aventus has been relatively unaffected by the pandemic. This allowed the company to report a 4.2% increase in funds from operations to $100 million with its full year results. It also revealed solid rent collections of 87% through the COVID-19 period and a high occupancy rate of 98%, which allowed it to pay an 11.9 cents per security distribution for the year. Based on the current Aventus share price, this equates to a generous 4.9% yield. I expect more of the same in FY 2021. Especially given the favourable Federal Budget.
National Storage REIT (ASX: NSR)
Income investors might want to consider this storage giant. Due partly to tailwinds such as population growth and downsizing by baby boomers, demand for storage facilities has been growing at a steady pace over the last few years. National Storage has been able to meet and profit from this demand with new developments, redevelopments of existing sites, and acquisitions. While population growth may be stifled in the short term because of the pandemic, I’m optimistic that a rebound in the housing market in 2021 will give demand a boost.
It also has exposure to the rapidly growing ecommerce market, with a growing number of small businesses actually running their operations from a storage unit. All in all, I believe National Storage is well-placed to continue its steady growth over the 2020s and beyond. For now, I estimate that it will pay an ~8 cents per unit distribution in FY 2021. Based on the current National Storage share price, this represents an attractive 4.3% yield.
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Returns As of 6th October 2020
More reading
- Why Macquarie (ASX:MQG) analysts are tipping share price gains for this ASX retail landlord
- Forget term deposits and buy these ASX dividend shares instead
- Buy Fortescue (ASX:FMG) and this ASX dividend share for income
- Are these 3 ASX shares strong recovery opportunities?
- Why Mirvac (ASX:MGR) and these ASX REITs could boom in 2020
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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