2 quality ASX dividend shares with attractive yields

ASX dividend shares represented by cash in jeans back pocket

Are you looking for a source of income in this low interest environment? If you are, then you may want to check out the ASX dividend shares listed below.

Both dividend shares offer investors generous yields that smash the interest rates on offer with term deposits. Here’s what you need to know about them:

Rural Funds Group (ASX: RFF)

The first dividend share to look at is Rural Funds. It is an Australian agricultural property company with a portfolio of high quality assets across five sectors. These comprise almonds, cattle, vineyards, cropping, and macadamias.

These properties are rented to some of the biggest players in the sector on very long leases. Combined with built in rental increases, this gives Rural Funds great visibility on its future earnings. As a result, it is able to confidently target distribution growth of 4% each year.

In FY 2022, management intends to increase its dividend by this amount once again to 11.73 cents per share. Based on the current Rural Funds share price of $2.97, this will mean a yield of just under 4%.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to look at is Australia’s largest telco, Telstra. It could be a good option due to its attractive yield and improving outlook.

The latter is being underpinned by the success of its T22 strategy and the recent announcement of the T25 strategy that will replace it. While T22 was based on transforming the company, T25 will be about driving growth.

This will see Telstra aim to achieve sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share (EPS) compound annual growth rates (CAGR) from FY 2021 to FY 2025.

All in all, this has many analysts believing that Telstra will soon be able to increase its dividend for the first time in a decade. For now, though, Telstra expects to pay a 16 cents per share dividend in FY 2022. Based on the current Telstra share price, this will mean a fully franked yield of almost 4%.

The post 2 quality ASX dividend shares with attractive yields appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Corporation 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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