If you're wanting to add some dividend shares to your portfolio this month, then the two listed below could be great options.
I feel both companies are well-placed to continue growing their dividends over the coming years despite the tough economic environment.
Here's why I think they are among the best on offer for income investors right now:
BWP Trust (ASX: BWP)
BWP is the largest owner of Bunnings Warehouse sites in Australia, with a portfolio of 68 stores. In addition to this, seven of its properties have adjacent retail showrooms that are leased to other retailers. At the end of FY 2020, the company had an occupancy rate of 98% and a weighted average lease expiry (WALE) of 4 years. From this, it was generating annual rental income of $151.4 million.
Given the quality of the Bunnings business and the home improvement giant's positive outlook, I believe it is well-placed to continue growing its distribution over the 2020s. Based on this and the current BWP share price, I estimate that it offers investors a forward 4.4% yield. It is also worth noting that Bunnings is owned by Wesfarmers Ltd (ASX: WES), which is also a major BWP shareholder with a ~23.6% stake.
Coles Group Ltd (ASX: COL)
Another ASX dividend share I would buy is Coles. I believe it is one of the best options for income investors due to its positive long term growth outlook and its defensive earnings. The latter was a key reason why Coles delivered strong growth in FY 2020 despite the pandemic. It reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020.
I expect more of the same in FY 2021 and over the remainder of the decade. This could make the supermarket operator a great buy and hold option. Based on the current Coles share price, I estimate that it offers a fully franked 3.6% dividend yield in FY 2021.
