Why Telstra (ASX:TLS) and this ASX dividend share could be buys

These two giants could be buys for income investors…
The post Why Telstra (ASX:TLS) and this ASX dividend share could be buys appeared first on The Motley Fool Australia. –

If you’re wanting to overcome low interest rates, then you may want to look at the dividend shares listed below.

Both shares are expected to provide investors with generous yields that are vastly superior to those offered with term deposits and savings accounts.

Here’s what you need to know about these dividend shares:

South32 Ltd (ASX: S32)

The first ASX dividend share to look at is South32. It could be a top option for investors that are not averse to investing in the mining sector.

South32 has exposure to a range of commodities such as alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc. The key commodity right now is arguably aluminium.

This is because analysts at Goldman Sachs believe aluminium is in the early stages of a multi-year bull market and expect South32 to benefit greatly. As a result, the broker has South32 shares on its conviction buy rating with a $3.80 price target. This compares to the latest South32 share price of $2.97.

As for dividends, Goldman is forecasting generous dividends in the near future. In FY 2021 it is expecting a yield in the region of 3.2%, whereas next year it is forecasting a yield over 8%.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share for income investors to look at is Telstra. Although its shares have recently hit a 52-week high, it may not be too late to invest.

This is due to its increasingly positive outlook being underpinned by sizeable cost cutting, restructuring, rational competition, and growth in the key mobile business.

Ord Minnett is very positive on Telstra and currently has a buy rating and $4.25 price target on its shares. The broker also continues to forecast 16 cents per share fully franked dividends for the foreseeable future.

Based on the current Telstra share price of $3.78, this will mean attractive yields of 4.2% over the coming years.

The post Why Telstra (ASX:TLS) and this ASX dividend share could be buys appeared first on The Motley Fool Australia.

Should you invest $1,000 in Telstra right now?

Before you consider Telstra, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

ASX 200 companies take heed: Telstra (ASX:TLS) boss says Australia faces ‘unprecedented’ cyber threat
Here are 3 heavily traded ASX 200 shares today

Why Telstra (ASX:TLS) shares could be a buy before reporting season
Telstra (ASX:TLS) share price struggles as Optus cries foul
Here are 3 of the most heavily traded ASX 200 shares today

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.

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