Here’s why I think now could be the time of income investors to buy Telstra Corporation Ltd (ASX:TLS) and this ASX dividend share…
The post Why I would buy Telstra (ASX:TLS) and this ASX dividend share right now appeared first on Motley Fool Australia. –
Whether or not the cash rate goes lower again next month, only time will tell. But one thing I’m very confident of, is that it will be a long time until rates go higher again.
In light of this, I continue to believe that dividend shares are better options for income investors than traditional interest-bearing assets such as term deposits and savings accounts.
With that in mind, here are two ASX dividend shares I would buy for income:
Aventus Group (ASX: AVN)
I think Aventus would be a great option for income investors. It is the owner and operator large format retail parks across Australia. While retail property is a tough place to be, Aventus’ focus on every day needs has allowed it continue its growth during the pandemic. For example, in FY 2021 it delivered a 4.2% increase in funds from operations (FFO) to $100 million.
I’m expecting more of the same in FY 2021, especially given the tax cuts that have been promised with the Federal Budget. These cuts should be supportive of consumer spending. In light of this, I forecast a 13.5 cents per share distribution this year. Based on the current Aventus share price, this represents an attractive 5.6% yield.
Telstra Corporation Ltd (ASX: TLS)
I think this telco giant would be a great option for income investors due to its generous yield and improving outlook. The latter is thanks to its T22 strategy, the arrival of 5G internet, and the easing of the NBN headwind. Together, I believe a return to earnings and dividend growth could be on the cards in the coming years.
For now, following its annual general meeting update this week, I’m very confident that Telstra will maintain its fully franked 16 cents per share dividend for the foreseeable future. Based on the latest Telstra share price, this represents a 5.5% dividend yield.
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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 Telstra Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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.