As I mentioned here at the weekend, the economics team at Westpac Banking Corp (ASX: WBC) are expecting the Reserve Bank to cut the cash rate to the record low of 0.1% next month.
In light of this, if you haven't done so already, I think now would be a good time to consider switching out of term deposits and into one of the many quality dividend shares listed on the Australian share market.
But which ASX dividend shares would be good options right now? Two that I would buy are listed below:
Rural Funds Group (ASX: RFF)
The first ASX dividend share I would buy is this agriculture-focused property group. Rural Funds is the owner of a number of quality properties across five agricultural sectors. These properties are leased to some of the biggest players in the industry, such as wine giant Treasury Wine Estates Ltd (ASX: TWE), on long term agreements. So much so, at the end of FY 2020, the company's weighted average lease expiry (WALE) stood at a lengthy 10.9 years.
These leases and their fixed rental increases led to the company performing strongly during the pandemic. Rural Funds reported an 8% increase in property revenue to $72 million in FY 2020. Looking ahead, further growth is expected in FY 2021. As a result, management is intending to lift its distribution by 4% to 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.8% yield.
Wesfarmers Ltd (ASX: WES)
Another ASX dividend share to consider buying is this conglomerate. I think it could be a great option due to the quality of its portfolio of businesses. This is particularly the case for its key Bunnings business, which I believe is well-placed to underpin strong growth in the 2020s. This is thanks to its strong market position, government stimulus, tax cuts, and the relaxing of responsible lending rules. The latter should be supportive of the home improvement market in the near term.
Overall, I believe Wesfarmers will be in a position to pay a fully franked dividend of ~$1.50 per share in FY 2021. Based on the latest Wesfarmers share price, this equates to an attractive fully franked 3.2% dividend yield.
