If you're looking for a source of income in this low interest rate environment, then you might want to take a look at the ASX dividend shares listed below.
I believe both of these shares are well-placed to pay generous dividends over the coming years. This could make them great options for income investors today:
BWP Trust (ASX: BWP)
The first ASX dividend share to buy 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. In August, the company released its full year results and revealed a 1% increase in profit before gains on investment properties to $117.1 million despite the pandemic.
In addition to this, at a time when the values of retail properties are being impaired, BWP Trust recognised a $93.6 million increase in the gains in fair value of its investment properties. Management notes that this reflects the continuing strong market support for Bunnings Warehouse properties from an investment and risk perspective. In FY 2021, management expects to pay a distribution in the region of 18.29 cents per unit. Based on the latest BWP Trust share price, this works out to be an attractive 4.5% yield.
Coles Group Ltd (ASX: COL)
Another dividend share that has been performing strongly this year despite the pandemic is Coles. In FY 2020, the supermarket giant delivered a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million. It also started FY 2021 positively and reported strong same store sales growth early in the financial year.
While its sales growth will inevitably moderate as the pandemic passes, given its defensive qualities, strong market position, and cost cutting plans, I'm confident Coles is still capable of delivering solid sales, earnings, and dividend growth over the next decade. This could make it a great ASX share for income investors to buy and hold for the long term. Based on the current Coles share price, I estimate that it offers investors a fully franked 3.2% dividend yield in FY 2021.
