If you’re searching for dividends in this low interest rate environment, then I would suggest you consider the ASX dividend shares listed below.
Here’s why I think they are in the buy zone right now:
BWP Trust (ASX: BWP)
The first option to consider is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia with a portfolio of 68 stores leased to the hardware giant. Earlier this month the company released its full year results and revealed a 1% increase in profit before gains on investment properties to $117.1 million. I believe this demonstrates the resilience of its business.
Another example of this was its property valuations. At a time when retail properties are being impaired, BWP Trust recognised a $93.6 million increase in the gains in fair value of its investment properties. Management advised that this reflects the continuing strong market support for Bunnings Warehouse properties from an investment and risk perspective. In FY 2021, BWP Trust expects to pay a distribution in the region of 18.29 cents per unit. This works out to be an attractive 4.6% yield.
Telstra Corporation Ltd (ASX: TLS)
This telco giant’s shares have come under pressure this month following the release of its full year results. Investors were selling its shares amid concerns that its guidance for FY 2021 would force a dividend cut. While a cut is certainly a possibility, a switch to a free cash flow-based dividend policy could allow for it to be maintained.
A number of analysts believe this will happen, securing its 16 cents per share dividend for the foreseeable future. If that proves correct, then Telstra’s shares will offer a fully franked 5.2% dividend yield in 2021. In light of this, I would be a buyer of the company’s shares right now. It is also worth noting that if it cuts its dividend to 12 cents, it would still provide an attractive 3.9% yield.
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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. 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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