Analysts rate these ASX dividend shares highly…
The post Why Telstra (ASX:TLS) and this ASX dividend share could be buys appeared first on The Motley Fool Australia. –
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:
Scentre Group (ASX: SCG)
The first dividend share to look at is Scentre. After facing extremely tough trading conditions at the height of the pandemic, things are returning to normal again for this shopping centre operator. This bodes well for its earnings and dividend recovery in the coming years.
And with the Scentre share price still down meaningfully from its pre-pandemic highs, analysts at Goldman Sachs believe now could be a good time to invest.
A recent note reveals that its analysts have reiterated their buy rating and $3.60 price target on the company’s shares. Goldman believes Scentre is far more positively leveraged to inflation than any other Australian real estate investment trusts under its coverage.
The broker is forecasting dividends per share of 14 cents in FY 2021 and then 17 cents in FY 2022. Based on the current Scentre share price of $2.85, this will mean yields of 4.9% and 6%, 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, Telstra is now free from this headwind and has a return to growth in its sights.
This is being driven by its significant cost cutting, rational competition, and its leadership position in 5G internet. In respect to the latter, the company is so far ahead of other telcos with its 5G network, that it has been tipped to grow its market share strongly 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.
Goldman Sachs is also a fan of Telstra. It currently has a $4.00 price target and is forecasting 16 cents per share fully franked dividends for the foreseeable future. Based on the current Telstra share price of $3.58, this will mean a 4.5% yield.
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Returns As of 15th February 2021
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James Mickleboro does not own any shares 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.