Tomorrow afternoon the Reserve Bank will meet to discuss the cash rate.
At present cash rate futures are pricing in a 57% probability of a rate cut to zero at tomorrow's meeting.
While I'm not overly convinced the central bank will cut rates again, I am very confident that it will be a long time before we see another rate increase.
In light of this, I think ASX dividend shares will remain the best place to invest your money for income for the foreseeable future.
With that in mind, I have picked out two dividend shares which I think would be great options for income investors:
BHP Group Ltd (ASX: BHP)
If you don't mind investing in the resources sector, then I think BHP would be a good option for income investors. I believe the mining giant is well-positioned to generate strong free cash flows in FY 2020 and FY 2021 thanks to its low cost operations and favourable commodity prices. Especially given the sky high iron ore price, which currently sits north of US$110 a tonne. This compares to the company's full year cost guidance of just US$13 to US$14 per tonne, which it recently revealed it expects to beat. Based on the current BHP share price, I estimate that its shares offer investors a forward fully franked ~4.5% dividend yield.
BWP Trust (ASX: BWP)
A second dividend share to consider buying is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia with a portfolio of 68 stores leased to the hardware giant. Thanks to the strength of the Bunnings business, BWP appears to have been unaffected by the pandemic and continues to collect rent as normal. In light of this, it recently revealed that it expects to be able to pay its distribution as normal this year. And looking to the future, I believe periodic rental increases mean the trust is well-placed to grow its income and distribution at a consistent and modest rate annually for the foreseeable future. Based on the current BWP share price, its shares currently offer a generous 4.8% distribution yield.
