If you’re wanting to add some dividend shares to your portfolio this week, then I think the two listed below could be top options.
Here’s why I think these dividend shares are in the buy zone:
Commonwealth Bank of Australia (ASX: CBA)
The first ASX dividend share to consider buying is Commonwealth Bank. It remains my favourite in the banking sector due to the quality of its operations, its strong management team, and robust balance sheet. In respect to the latter, when it released its full year results earlier this month, it revealed a CET1 ratio of 11.6%. This is comfortably ahead of APRA’s ‘unquestionably strong’ benchmark of 10.5%.
Given the pandemic and the potential for APRA to place further restrictions on dividend payments in 2021, it is difficult to predict what dividend the bank will play next year. However, I would expect something in the region of $3.00 per share. Based on the Commonwealth Bank share price, this equates to a generous fully franked 4.3% yield.
Rural Funds Group (ASX: RFF)
Another dividend share to consider buying is Rural Funds. It is a leading agriculture-focused real estate company which owns a collection of high quality rural assets. These assets are leased to some of the biggest names in the industry such as Treasury Wine Estates Ltd (ASX: TWE).
I’m a big fan of Rural Funds because of its long leases and the periodic rental increases included in them. This gives the company great visibility on its future earnings and ultimately its distributions. In FY 2021 it intends to increase its distribution in line with its long term target of 4%. This will mean a distribution of 11.28 cents per share. Which based on the current Rural Funds share price, means a very attractive 5.15% yield.
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More reading
- 2 of the best ASX dividend shares to buy next week
- 5 blue chip ASX 200 shares a beginner can use to start a share portfolio
- Where to invest your Commonwealth Bank dividends in September
- Which ASX bank share is the best buy for dividend income?
- This ASX fund manager is going back to value in a post-COVID world. Here’s why.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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.
The post Why I would buy CBA and this top ASX dividend share appeared first on Motley Fool Australia.
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