As I mentioned here earlier today, the Reserve Bank is expected to keep the cash rate on hold at a record low of 0.25% on Tuesday.
And unfortunately for income investors, this is expected to remain the case for the next three years.
In light of this, I believe income seekers ought to consider investing in some of the high quality dividend shares on the ASX in order to generate a sufficient income.
Two that I would buy next week are listed below:
BWP Trust (ASX: BWP)
The first ASX dividend share to buy is BWP. This real estate investment trust invests in and manages commercial properties throughout Australia. While times are hard for many property companies because of the pandemic, BWP has not only come out of it unscathed, but arguably stronger. This is because the majority of its properties are leased to hardware giant Bunnings, which has been a strong performer during the pandemic. So much so, BWP Trust recognised a $93.6 million increase in the gains in fair value of its investment properties in FY 2020. Overall, given the strength of the Bunnings business, I believe BWP is well-placed to grow its distribution at a solid rate in the future. Based on the current BWP share price, I estimate that it offers investors a forward 4.5% yield.
Telstra Corporation Ltd (ASX: TLS)
Another dividend share I would buy is Telstra. Thanks to its ongoing operating cost reductions, improving industry conditions, the arrival of 5G, and the easing NBN headwind, I believe Telstra's outlook over the coming years is looking very positive. And while the pandemic is weighing on its performance, particularly with roaming revenues, I'm confident it will make a long awaited return to growth in the next two to three years. Opinion is divided on the dividend it will pay in FY 2021. I'm optimistic it will adjust its policy and maintain a 16 cents per share dividend. However, the worst case scenario of a cut to 12 cents per share wouldn't be a disaster. Based on the current Telstra share price, these equate to attractive fully franked yields of 5.5% and 4.15%, respectively.
