2 high yield ASX blue chip dividend shares to buy next week

Telstra Corporation Ltd聽(ASX:TLS) and this ASX dividend share could be top options for income investors next week…

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If you鈥檙e looking for a way to beat low interest rates, then the ASX dividend shares listed below could be worth considering.

I believe both dividend shares could be great options for income investors due to their generous yields and strong businesses. Here鈥檚 why I would buy them:

BHP Group Ltd聽(ASX: BHP)

If you don’t have exposure to the resources sector, then you might want to get it with an investment in BHP. I think BHP is the best option in the sector due to its diverse, world class, and low cost operations. The mining giant also has a number of growth opportunities, particularly in oil, that I believe could create value for shareholders in the coming years.

In the meantime, BHP looks well-positioned to deliver very strong free cash flows again in FY 2021 thanks to favourable iron ore and copper prices. The good news is that given the strength of its balance sheet, I expect the majority of its cash flow to be returned to shareholders. Based on the latest BHP share price, I estimate that it offers investors a fully franked forward ~4.5% yield.

Telstra Corporation Ltd聽(ASX: TLS)

Another dividend share to consider buying is this beaten down telco giant. While the sizeable decline in the Telstra share price this year is disappointing for shareholders, I think it is a buying opportunity for non-shareholders. Especially if the company shifts its dividend policy to a free cash flow-based one and maintains its dividend.聽

In addition to this, after several years of profit declines, I believe a return to growth is on the horizon in the next couple of years. This is due to its T22 strategy, the easing NBN headwinds, and 5G internet. I expect the latter to be a big boost to mobile revenues once there is an iPhone that supports it. At present I still expect the company to pay a 16 cents per share dividend in FY 2021. Based on this and the current Telstra share price, it offers investors a fully franked 5.6% dividend yield.

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*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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