Buy CBA (ASX:CBA) and this ASX share for their dividends

Commonwealth Bank of Australia聽(ASX:CBA) and this ASX dividend share could be top options for income investors. Here’s why…

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Later this week the Reserve Bank of Australia is widely expected to cut the cash rate to a new record low of 0.1% or even 0%.

Unfortunately, I think it could be a long time until interest rates move higher from here, let alone back to normal levels again.

In light of this, I continue to believe that income investors would be better off sticking with dividend shares instead of term deposits or savings accounts.

But which dividend shares should you buy? Two top dividend shares I would buy are listed below. Here鈥檚 why I like them in the current low interest rate environment:

Commonwealth Bank of Australia聽(ASX: CBA)

Rather than put money in its savings accounts, I think investors should be buying its shares. Although the pandemic is certainly hitting the bank hard, it is reassuring to see that the number of loans on deferral continue to reduce. I believe this is a sign that the provisions it has made will be sufficient.

In light of this and the relaxing of responsible lending rules, I believe Commonwealth Bank鈥檚 outlook is improving greatly. So with its shares still down over 24% from their 52-week high, I think now could be an opportune time to invest with a long term view.

Finally, estimating what dividend the bank will pay in FY 2021 is difficult because of the pandemic. However, based on the current Commonwealth Bank share price, I would expect a fully franked yield in the region of 4% over the next 12 months.

National Storage REIT聽(ASX: NSR)

Another ASX dividend share I would buy is National Storage. It is a leading self-storage operator which I believe has a very positive long term growth outlook. This is thanks to its organic and inorganic growth opportunities. The latter is through its growth through acquisition strategy which has been very effective over the last few years.

Pleasingly, management has persisted with this strategy even during the pandemic. Last week at its annual general meeting, National Storage revealed that it has completed eight acquisitions totalling $139 million in FY 2021. Management also advised that its forward-looking acquisition pipeline remains strong.

Another positive from its annual general meeting was that its occupancy levels are increasing. It advised that in excess of 60,000 square metres of occupancy has been added since 1 July, which is the equivalent of 12 full centres.

Finally, management reaffirmed its underlying earnings per share guidance of 7.7 cents to 8.3 cents per security. Based on this, its dividend policy, and the latest National Storage share price, I estimate that its shares offer a 4.2% yield.

Wondering where you should invest $1,000 right now?

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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

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