With interest rates unlikely to improve from their record lows any time soon, it’s very fortunate that the Australian share market has dividend shares offering investors very generous yields.
Two ASX shares dividend shares with yields above 4% are listed below. Here’s what you need to know about them:
BWP Trust (ASX: BWP)
BWP Trust is the largest owner of Bunnings Warehouse sites in Australia. It currently owns 68 stores, with seven of these properties having adjoining retail showrooms that are leased to other retailers. At the last count, the company’s portfolio was valued at ~$2.5 billion, was generating annual rent of $151.4 million, and enjoyed an occupancy rate of 98%.
Due to the strength of its tenancies, BWP has been able to collect rent largely as normal this year despite the pandemic. This allowed the company’s board to grow its distribution in FY 2020 to 18.3 cents per share.
Based on the current BWP share price, this represents a trailing 4.2% dividend yield. Management has suggested that its distribution is likely to be similar in FY 2021.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused property group. At the end of FY 2020, it owned 61 properties across five agricultural sectors. This includes almond properties leased to Select Harvests Limited (ASX: SHV) and wine properties leased to Treasury Wine Estates Ltd (ASX: TWE).
As with BWP, it has been a solid performer during the pandemic. In FY 2020, the company reported an 8% increase in property revenue to $72 million. This allowed the company to increase its distribution yet again.
And pleasingly, thanks to its fixed rental increases, management has been able to provide guidance for another increase in FY 2021. It intends to pay shareholders a distribution of 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.5% yield.
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Returns As of 6th October 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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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