Later today the Reserve Bank of Australia is widely expected to cut the cash rate at its November monetary policy meeting.
According to the latest cash rate futures, the market has priced in an 84% probability of a cut to a record low of zero.
Unfortunately, this means income investors and savers are going to have to contend with even lower rates in the near term.
Fortunately, the Australian share market is home to a wide range of companies that share their profits with shareholders in the form of dividends.
For example, two ASX dividend shares with yields above 4% are named below:
BWP Trust (ASX: BWP)
BWP is a real estate investment trust with a focus on commercial assets. The majority of its assets are leased to home improvement giant, Bunnings Warehouse. In FY 2020, BWP reported like-for-like rental growth of 2.4% and an occupancy rate of 98%. This led to it delivering a 1% increase in profit before gains on investment properties to $117.1 million despite the COVID crisis.
It also allowed the company to pay its distribution as normal. BWP paid shareholders a full year distribution of 18.29 cents per unit, up 1% year on year. Based on the current BWP share price, this represents a 4.5% yield.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused property group that owns a number of properties across five agricultural sectors. These high quality properties and are leased on long term agreements to some of the biggest operators in the industry such as wine giant Treasury Wine Estates Ltd (ASX: TWE). At the last count, Rural Funds’ weighted average lease expiry (WALE) stood at 10.9 years.
This gives management great visibility on its future earnings and has allowed it to provide guidance even during the pandemic. In FY 2021, the company intends to increase its distribution by 4% to 11.28 cents per share. Based on the current Rural Funds share price, this equates to a 4.75% yield.
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Returns As of 6th October 2020
More reading
- Why I would buy Woolworths (ASX:WOW) and these shares for a retirement portfolio
- Top ASX shares to buy in November 2020
- 3 ASX 200 shares that every investor should own
- How ASX investors can capture these ‘billionaire trends’
- Why market crashes are useful for buying ASX dividend shares
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. 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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