Unfortunately, as much as income investors may wish for it, Santa will not be bringing interest rate increases this Christmas.
In fact, if many economists are to be believed, it could be over two years until rates start to head higher from their record lows.
In light of this, dividend shares look likely to remain the best way to earn a passive income in 2021.
But which dividend shares should you buy? Here are two to consider:
BHP Group Ltd (ASX: BHP)
Investors that are not opposed to investing in the resources sector, might want to take a closer look at the Big Australian. It is one of the world's largest miners and the owner of some of the highest quality operations across the globe.
With iron ore and copper prices surging higher this year and oil prices rebounding strongly from their lows, BHP has been tipped to deliver a bumper profit result in FY 2021. And with its balance sheet in such good health, the company looks set to reward shareholders handsomely with dividends.
Macquarie is expecting this to be the case and has forecast a fully franked ~$3.85 per share dividend in FY 2021. Based on the current BHP share price, this represents a massive 9% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Another dividend share to look at is Telstra. With the end of the NBN rollout in sight and the company's T22 strategy progressing very well, the hard days certainly appear to be behind this telco giant. In addition to this, the arrival of 5G internet looks set to give its hugely important mobile business a big boost in the coming years.
Another potential positive on the horizon is its plan to split into three separate businesses. This will allow Telstra to take advantage of potential monetisation opportunities and unlock value for shareholders.
Goldman Sachs is pleased with its plan and is positive on its outlook. It has a buy rating and $3.60 price target on Telstra's shares and is forecasting a 16 cents per share fully franked dividend in FY 2021 and beyond. Based on the current Telstra share price, this would provide investors with a 5.3% dividend yield.
