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2 ASX blue chip dividend shares to buy this month

asx blue chip shares represented by pile of blue casino chips in front of bar graph
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If you’re looking to add some blue chip dividend shares to your portfolio, then the two listed below might be ones to consider.

Here’s what you need to know about them:

Westpac Banking Corp (ASX: WBC)

Westpac is one of Australia’s largest banks with a market capitalisation of $72 billion. Times have certainly been hard for the bank in recent years, but its outlook is improving significantly. This is thanks to an improving housing market, the relaxing of responsible lending rules, and the prospect of an effective COVID-19 being developed in the very near future.

And although its shares have staged a strong recovery in recent weeks, one broker that believes they can still go higher from here is Morgans. Earlier this month its analysts put an add rating and $21.00 price target on the company’s shares. The broker is also forecasting dividends of 88 cents per share and 144 cents per share for FY 2021 and FY 2022, respectively. The latter represents a fully franked 7.2% dividend yield.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is the owner of a number of Australia’s most popular retailer such as Kmart, Target, Catch, Officeworks, and Bunnings. It also owns a number of chemicals and industrials businesses. The key business by far is the Bunnings business. In FY 2020 the hardware giant contributed 64.1% of Wesfarmers’ earnings before tax.  

The good news for shareholders is that Bunnings has been on fire so for in FY 2021. For the first four months of the financial year, it delivered sales growth of 25.2% over the prior corresponding period.

According to a note out of Credit Suisse, its analysts believe Wesfarmers is well-placed for growth this year. As such, they have an outperform rating and $51.59 price target on the company’s shares. The broker is also forecasting a dividend of 181 cents per share in FY 2021. Based on the latest Wesfarmers share price, this represents a fully franked 3.7% dividend yield.

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Returns As of 6th October 2020

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Wesfarmers 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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