There are a lot of dividend shares for investors to choose from on the Australian share market. Which certainly is a blessing in this ultra low interest rate environment that we are living in.
Two ASX dividend shares that provide generous dividend yields are listed below. Here’s what you need to know about them:
BHP Group Ltd (ASX: BHP)
BHP is widely regarded as one of the highest quality miners in the world thanks to its long history, world class and low cost operations, and its significant growth opportunities. At present, the mining giant is benefiting greatly from favourable commodity prices. This is expected to underpin another strong full year result in FY 2021 and allow the company to reward its shareholders with more generous dividends.
According to a recent note out of Macquarie, its analysts have an outperform rating and $44.00 price target on its shares. The broker is also forecasting a ~$2.79 per share fully franked dividend. Based on the current BHP share price, this would mean a sizeable 7.5% dividend yield over the next 12 months.
BWP Trust (ASX: BWP)
BWP Trust is the largest owner of Bunnings Warehouse sites in Australia. At the last count, the company’s portfolio owned 68 stores. In addition to this, seven of the properties have adjacent retail showrooms that are leased to other retailers. Its portfolio currently has a value of approximately $2.5 billion, generates annual rent of $151.4 million, and boasts a 98% occupancy rate.
Bunnings has proven to be a great tenant in 2020. Due to the strength of the hardware retailer’s business, BWP has been able to collect rent as normal at a time when many other landlords have struggled with their collections. This allowed the BWP board to grow its distribution in FY 2020.
Analysts at UBS expect more of the same in FY 2021 and are forecasting an 18.3 cents per share distribution. Based on the current BWP share price, this will mean a yield of 4.3% for investors.
Where to invest $1,000 right now
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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.