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Cash rate on hold until after 2022? Buy these ASX dividend shares

According to the latest weekly economic update by Westpac Banking Corp (ASX: WBC), its team continue to believe the cash rate will remain on hold at the record low of 0.25% beyond 2022.

While this is great news for borrowers who will be able to benefit from low rates for some time to come, it is quite the opposite for income investors.

The good news is that there are plenty of dividend shares out there that offer generous dividend yields.

Two that I think would be great options for income investors are listed below. Here’s why I would buy them:

Rural Funds Group (ASX: RFF)

The first ASX dividend share to consider buying is Rural Funds. It is a leading agriculture-focused property company which owns a collection of high quality assets. These assets are leased to some of the biggest names in the industry such as Treasury Wine Estates Ltd (ASX: TWE). I’m a big fan of Rural Funds because of its long leases and the periodic rental increase included in them. This gives the company great visibility with its future earnings and ultimately its distributions. In FY 2021 it intends to grow its distribution by 4% to 11.28 cents per share. Based on the current Rural Funds share price, this equates to a very attractive 5.4% yield.

Telstra Corporation Ltd (ASX: TLS)

A second ASX dividend share to consider buying is Telstra. Times have been hard for the telco giant in recent years, but things are finally starting to improve. Due to its T22 strategy and the easing of the NBN headwind, I believe a return to growth is not far away. In the meantime, I’m confident that Telstra’s free cash flows will be sufficient to maintain its 16 cents per share fully franked dividend for the foreseeable future. This equates to a generous 4.75% dividend yield based on the latest Telstra share price. Though, it is worth noting that Telstra is due to release its full year results next week. So it may be prudent to wait for those before investing.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Limited. 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.

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