These dividend shares could be in the buy zone…
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With interest rates likely to remain low for some time to come, potentially even years, the yields on the ASX dividend shares listed below could be even more attractive than normal for income investors.
Here’s what you need to know about these dividend shares that have been rated as buys:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
This banking giant could be a good option after returning to form in FY 2021. During the first half, it reported a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020. And thanks to its strong capital position, it has just announced a $1.5 billion share buyback.
Looking ahead, thanks to favourable trading conditions, a booming housing market, and the relaxation of responsible lending rules, ANZ looks well-placed to build on its strong first half showing. It also has the balance sheet strength to underpin another buyback in the coming months if trading and asset conditions don’t deteriorate.
Analysts at Morgans are very bullish on the bank. They currently have an add rating and $34.50 price target on its shares.
The broker is also forecasting fully franked dividends of 145 cents per share in FY 2021 and 165 cents per share in FY 2022. Based on the latest ANZ share price of $28.31, this represents yields of 5.1% and 5.8%, respectively.
Telstra Corporation Ltd (ASX: TLS)
Another ASX dividend share to look at is this telco giant. After several years of difficulties because of the NBN rollout, this headwind is finally easing and a return to growth is now in Telstra’s sights.
This is being supported by its significant cost cutting, rational competition, and its leadership position in 5G internet. In respect to the latter, the company has such a lead with its 5G network, that it has been tipped to grow its market share in the coming years.
In addition to this, the company is in the process of offloading assets such as its towers to unlock value for shareholders.
Ord Minnett is a fan of Telstra. It currently has a buy rating and $4.40 price target on its shares. The broker is expecting 16 cents per share fully franked dividends for the foreseeable future. Based on the current Telstra share price of $4.02, this will mean 4% yields.
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*Returns as of August 16th 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.