The good news for income investors in this low interest rate environment is that the Australian share market has a large number of dividend shares offering generous yields.
Two that provide exactly this are listed below. Here’s why these ASX dividend shares could be the ones to buy:
Charter Hall Social Infrastructure REIT (ASX: CQE)
Charter Hall Social Infrastructure REIT is a real estate investment trust that has a focus on social infrastructure properties. Among its portfolio are properties with specialist use, limited competition, and low substitution risk. This includes childcare centres and government properties.
Demand for its properties has been very strong, leading to the company recently reporting an occupancy rate of 99.7%. Positively, these tenants aren’t going anywhere any time soon and are in for the long run. Charter Hall Social Infrastructure REIT’s weighted average lease expiry (WALE) stood at a sizeable 14 years at the end of the first half. Another positive is that the number of leases on fixed rent reviews has increased to 63.3%. This bodes well for its future rental income growth.
The company’s strong form this year means it is expecting to reward shareholders with a higher than planned 15.7 cents per unit distribution. Based on the current Charter Hall Social Infrastructure share price, this represents a 5.15% yield.
One broker that is a fan is Goldman Sachs. It currently has a conviction buy rating and $3.45 price target on its shares.
Telstra Corporation Ltd (ASX: TLS)
Another ASX dividend share to consider is Telstra. After several disappointing years caused by the NBN rollout, this telco giant looks ready to return to growth at long last.
Last month when Telstra released its half year results, the company’s CEO, Andy Penn, revealed that he has set some bold targets for the next couple of years. And pleasingly, he appears confident the company can achieve this thanks to industry trends and its T22 strategy.
Telstra is aiming for mid to high single-digit growth in underlying EBITDA in FY 2022 and then further growth in FY 2023.
In light of this, the company’s dividend cuts appear to be over and 16 cents per share looks set to be the bottom. Based on the latest Telstra share price, this will mean a fully franked 5% dividend yield for investors.
Goldman Sachs is also a fan of Telstra. Its analysts currently have a buy rating and $4.00 price target on its shares.
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Returns As of 15th February 2021
More reading
- Top brokers name 3 ASX shares to buy today
- ASX 200 down 0.6%: Telstra upgraded, Webjet rated as a buy, Westpac update
- Leading brokers just upgraded these ASX shares to “buy” today
- Is the Telstra share price (ASX:TLS) a buy today?
- ASX 200 Weekly Wrap: Calm restored to the ASX 200
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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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