With interest rates at record lows and likely to remain at these levels for some time, it is very difficult for income investors to earn a sufficient income from traditional interest-bearing assets.
The good news is that the Australian share market has come to the rescue with a large number of dividend shares offering attractive yields.
Two ASX dividend shares that are popular with investors are listed below:
Accent Group Ltd (ASX: AX1)
Accent is a leading footwear-focused retailer which owns a number of very popular retail store brands. It also has a thriving online business that has been performing exceptionally well during the pandemic.
A recent trading update reveals that its like for like sales were up 15.7% during the first 20 weeks of FY 2021 (excluding its Auckland and Victorian stores). The company also revealed that its online sales were up 129% over the period.
Accent isn’t resting on its laurels and appears to be wanting to dominate the local market. So much so, it has just launched two new store brands, Australian Stylerunner and Pivot. This is part of its store expansion plan which is aiming to add approximately 80 new stores in FY 2021.
Analysts at Citi are forecasting a 7.5 cents per share dividend from Accent in FY 2021. Based on the current Accent share price, this represents a 3.2% dividend yield.
BWP Trust (ASX: BWP)
The second dividend share to look at today is BWP Trust. It is the owner of 68 Bunnings Warehouse sites across Australia.
Thanks to the strength of the hardware giant’s business, BWP was able to collect its rent largely as normal during the pandemic. Combined with an increase in the fair value of its assets, this led to the company reporting an impressive 24.4% increase in full year profit to $210.6 million in FY 2020.
This positive form meant that BWP was one of the only companies in the real estate sector to grow its dividend in FY 2020. It paid an 18.29 cents per unit distribution to shareholders and advised that a similar distribution is expected this year. Based on the current BWP share price, this represents a 4.1% yield for investors.
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Returns As of 6th October 2020
More reading
- 2 quality ASX dividend shares to buy next week
- 2 ASX dividend shares with 4%+ yields
- Smash term deposits with these ASX dividend shares
- Why did the Accent (ASX:AX1) share price defy the odds in 2020?
- ASX 200 down 0.8%: Big four banks and tech shares drag the market lower
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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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