Insights

Buy CBA (ASX:CBA) and this ASX share for their dividends

Commonwealth Bank of Australia (ASX:CBA) and this ASX dividend share could be top options for income investors. Here’s why…
The post Buy CBA (ASX:CBA) and this ASX share for their dividends appeared first on Motley Fool Australia. –

Dividend shares

Later this week the Reserve Bank of Australia is widely expected to cut the cash rate to a new record low of 0.1% or even 0%.

Unfortunately, I think it could be a long time until interest rates move higher from here, let alone back to normal levels again.

In light of this, I continue to believe that income investors would be better off sticking with dividend shares instead of term deposits or savings accounts.

But which dividend shares should you buy? Two top dividend shares I would buy are listed below. Here’s why I like them in the current low interest rate environment:

Commonwealth Bank of Australia (ASX: CBA)

Rather than put money in its savings accounts, I think investors should be buying its shares. Although the pandemic is certainly hitting the bank hard, it is reassuring to see that the number of loans on deferral continue to reduce. I believe this is a sign that the provisions it has made will be sufficient.

In light of this and the relaxing of responsible lending rules, I believe Commonwealth Bank’s outlook is improving greatly. So with its shares still down over 24% from their 52-week high, I think now could be an opportune time to invest with a long term view.

Finally, estimating what dividend the bank will pay in FY 2021 is difficult because of the pandemic. However, based on the current Commonwealth Bank share price, I would expect a fully franked yield in the region of 4% over the next 12 months.

National Storage REIT (ASX: NSR)

Another ASX dividend share I would buy is National Storage. It is a leading self-storage operator which I believe has a very positive long term growth outlook. This is thanks to its organic and inorganic growth opportunities. The latter is through its growth through acquisition strategy which has been very effective over the last few years.

Pleasingly, management has persisted with this strategy even during the pandemic. Last week at its annual general meeting, National Storage revealed that it has completed eight acquisitions totalling $139 million in FY 2021. Management also advised that its forward-looking acquisition pipeline remains strong.

Another positive from its annual general meeting was that its occupancy levels are increasing. It advised that in excess of 60,000 square metres of occupancy has been added since 1 July, which is the equivalent of 12 full centres.

Finally, management reaffirmed its underlying earnings per share guidance of 7.7 cents to 8.3 cents per security. Based on this, its dividend policy, and the latest National Storage share price, I estimate that its shares offer a 4.2% yield.

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Click Here For Your Free Stock Report

Returns As of 6th October 2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Buy CBA (ASX:CBA) and this ASX share for their dividends appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!