In today's low interest rate environment, yield is something of a sacred commodity. After all, getting a 5–6% return on your cash investments seems like something from a lifetime ago.
These days, even term deposits are struggling to return anything above 1.5%, and things aren't much better in the bond market.
That leaves ASX dividend shares as one of the only real alternatives. Dividends and stocks are riskier than cash and bonds, but the return you can expect from them makes it worth some serious consideration, in my opinion.
Here are 2 ASX shares that offer yields over 6% today.
Australian and New Zealand Banking Group (ASX: ANZ)
ANZ inflamed its investors a few weeks ago when it announced the level of franking that would come with its dividends would be dropped from 100% to 70%. Whilst this does reduce the shareholders returns from ANZ, the ANZ share price has dropped substantially since then – making this a great buying opportunity in my opinion.
ANZ's raw dividend remains at $1.60 per share (annualised), meaning ANZ shares are offering a starting yield today of 6.47% – or 8.41% with the partial franking. Thus, I think ANZ is a top buy today for dividend income.
Telstra Corporation Ltd (ASX: TLS)
Many investors would still harbour some healthy hatred of Telstra due to the dividend carnage that this telco was forced to unleash on its investors a few years ago. But the fact remains that today, Telstra is still looking attractive as a dividend stock.
On current prices, Telstra's annual 16 cents per share dividend translates to a starting yield of 4.51% – or 6.43% including full franking credits. Telstra is also a relatively defensive stock (if you don't count the ongoing uncertainty from the whole NBN shemozzle), which I think is a great attribute in Telstra's favour. Thus, I think Telstra is a solid buy for dividend income today as well.
Foolish takeaway
With these 2 ASX shares, you are getting 2 stocks that offer dividend yields exceeding 6% with franking. Whilst there are always uncertainties with ASX dividend shares, these blue-chips have a long history of delivering high yield income, so I think you could certainly do worse in today's low interest rate world.
