2 blue chip ASX dividend shares to buy

Coles Group Ltd (ASX:COL) and this ASX blue chip dividend share could be top options for income investors right now…

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If you're wanting to add a few blue chip dividend shares to your portfolio, then you may want to check out the ones listed below.

Here's why these ASX shares come highly rated:

Coles Group Ltd (ASX: COL)

Coles is of course one of Australia's leading supermarket operators and most recognisable brands. Thanks to a combination of its defensive qualities, store expansion, and long track record of same store sales growth, Coles has been growing its top and bottom lines at a solid rate in recent years.

This certainly was the case in FY 2020 when Coles' sales surged during the height of the pandemic. Pleasingly, this positive form has continued in FY 2021, with sales across the business growing strongly in the first quarter.

Analysts at Citi appear confident that this can continue. The broker recently retained its buy rating and lifted the price target on the Coles share price to $21.20. It expects groceries demand to remain strong over the medium term. It also notes that margins are firming up thanks to rational competition in the industry. The broker is forecasting a 63.5 cents per share fully franked dividend in FY 2021. Based on the current Coles share price, this represents a 3.5% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

It has been a tough few years for this telco giant, but with its T22 strategy delivering on its objectives, the NBN headwind easing, and 5G internet taking off, its outlook has improved greatly in recent months. In addition to this, the company has announced plans to split into three separate entities. This has been well-received by the market and is expected to unlock value for shareholders.

Credit Suisse appears to be a fan of this plan. Its analysts suggested that it reinforces its view around the underlying value of Telstra's assets. The broker also believes the company is well-placed to maintain its 16 cents per share dividend for the foreseeable future. Based on the current Telstra share price, this means a fully franked 5.25% dividend yield. Credit Suisse has an outperform rating and $3.85 price target on its shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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