If you’re looking for decent dividend yields for 2021, then you might want to look at the dividend shares listed below.
Here’s what is expected from them next year:
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 are leased on ultra long term agreements to some of the biggest operators in the industry. This includes wineries leased to wine giant Treasury Wine Estates Ltd (ASX: TWE).
At the end of FY 2020, Rural Funds had a weighted average lease expiry (WALE) of 10.9 years. Given that these leases have rental increases built into them, the company has great visibility on its future earnings.
In light of this, management appears confident that it is well-positioned to continue growing its distribution by its 4% per annum target each year in the future. This will mean a distribution of 11.28 cents per share in FY 2021. Which based on the current Rural Funds share price, equates to a 4.35% yield.
Telstra Corporation Ltd (ASX: TLS)
After several disappointing years due to the NBN impact on its earnings, Telstra’s outlook is becoming increasingly positive. This is being underpinned by its T22 strategy, which is stripping out costs and simplifying its business.
Another big positive is the status of the NBN rollout. While this rollout still has further to go, the headwinds it is causing are now peaking.
In light of this, a return to growth doesn’t appear far away. Especially given the rational competition in the industry and the arrival of 5G internet. The latter is expected to give its average mobile revenue per user metric a boost in the coming years.
Finally, with the Telstra board intending to do what it can to maintain its 16 cents per share dividend, the company’s shares could yield very generous dividends in the coming years. Based on the current Telstra share price, a 5.3% fully franked dividend is expected next year.
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Returns As of 6th October 2020
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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 RURALFUNDS STAPLED, Telstra Limited, and Treasury Wine Estates 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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