With the interest rates on offer with most savings accounts just 0.05%, I believe income investors are better off skipping them and focusing on dividend shares if they have no immediate use for these funds.
But which dividend shares should you invest in? Two dividend shares that I think would be great options are listed below:
The first ASX dividend share I would suggest investors look at is Aventus. I think it is fair to say that the pandemic has hit retail property companies incredibly hard. In light of this, I can understand why investors may wish to stay clear of the sector right now. However, I’m optimistic that Aventus will be a lot less impacted than others.
This is because it specialises in large format retail parks and has a large proportion of its tenancies weighed towards everyday needs. This includes high quality retailers such as ALDI, Bunnings, Officeworks, and The Good Guys. I believe this leaves it better positioned than most to ride out the storm. As a result, I estimate that Aventus shares could provide investors with a dividend yield of over 6% for FY 2021.
Dicker Data Ltd (ASX: DDR)
Another dividend share to consider buying is Dicker Data. It is a wholesale distributor of computer hardware and software across the ANZ region. It has been one of only a handful of companies that have accelerated their growth during the pandemic. During the first half of FY 2020, Dicker Data reported half year revenue above $1 billion for the first time.
But even better was its bottom line performance. Thanks to solid top line growth and further margin expansion, Dicker Data recorded a 30.4% lift in net profit before tax to $42 million. In light of this, the company is on course to increase its dividend by 31% to 35.5 cents per share this year. Based on the current Dicker Data share price, this represents a generous fully franked 4.7% dividend yield.
Where to invest $1,000 right now
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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 Dicker Data 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.