In 2020 the Reserve Bank cut the cash rate to the lowest levels that we’ve ever seen in Australia. This was undoubtedly a bitter blow to income investors.
Fortunately, in this low interest rate environment, the Australian share market is home to dividend shares that offer investors generous yields.
For example, two ASX shares dividend shares with yields above 4% are listed below. Here’s what you need to know about them:
BWP Trust (ASX: BWP)
The first dividend share to look at is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia. It currently owns 68 stores, with seven of these properties having adjoining retail showrooms that are leased to other retailers. At the last count, the company’s portfolio was valued at ~$2.5 billion and had an occupancy rate of 98%.
Due to the strength of its tenancies, BWP was a solid performer in FY 2020 and was able to grow its distribution to 18.3 cents per share. Management is also expecting a similar pay out in FY 2021. Based on the current BWP share price, this represents a 4.1% dividend yield.
Westpac Banking Corp (ASX: WBC)
The big four banks may have recovered strongly from their COVID lows, but they are still expected to provide investors with generous yields in 2021. Especially now APRA has removed its dividend restrictions on the sector.
Another positive is the way the economy, and particularly the housing market, is rebounding from the pandemic. This has many believing the worst is over for the banks and that they could deliver modest growth in the coming years.
In respect to dividends, analysts at UBS are forecasting a $1.00 per share dividend from Westpac in FY 2021 and then a $1.20 per share dividend in FY 2022. Based on the current Westpac share price, this represents fully franked ~5.2% and 6.2% dividend yields, respectively.
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Returns As of 6th October 2020
More reading
- ASX 200 down 0.8%: Big four banks and tech shares drag the market lower
- 2 ASX dividend shares to solve your income needs
- 2 ASX shares with huge fully franked yields
- ASX 200 Weekly Wrap: ASX hits new post-March high
- 2 ASX dividend shares with 4%+ yields
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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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