2 quality ASX dividend shares to buy

Wesfarmers Ltd (ASX:WES) and this ASX dividend share could be top options for income investors in this low interest rate environment…

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With interest rates unlikely to be going higher any time soon, the Australian share market looks set to be the best place to earn a passive income for the foreseeable future.

The good news is that there are plenty of options for income investors to choose from. Two that could be worth considering are named below:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

With the worst of the pandemic now behind us, things are looking a lot more positive for the big four banks. Especially with the housing market tipped to rebound and the relaxing of responsible lending rules.

Another positive for investors is recent news that APRA will be removing its dividend restrictions on the banks from 2021. This follows some significant stress testing by the regulator, which found that the banking sector was strong enough to withstand even the most catastrophic economic crisis.

Morgans is positive on the bank and recently reiterated its add rating and lifted its price target on the company's shares to $26.00. The broker is also forecasting a $1.27 per share dividend in FY 2021 and a $1.50 per share dividend in FY 2022. Based on the current ANZ share price, this represents 5.5% and 6.5% dividend yields, respectively.

Wesfarmers Ltd (ASX: WES)

Another dividend share to look at is Wesfarmers. It is a leading conglomerate that owns a wide range of popular businesses including Kmart, Target, Catch, Officeworks, and Bunnings.

The latter is the company's biggest contributor to its overall earnings. This has been a huge positive in 2020, as the hardware retailer has been a very strong performer. Thankfully, Bunnings has continued this positive trend in FY 2021 and delivered sales growth of 25.2% for the first four months of the financial year.

Combined with strong performances across other key brands, this appears to have positioned Wesfarmers to deliver a very positive full year result next year.

According to a note out of Morgan Stanley, its analysts have pencilled in a 160 cents per share fully franked dividend in FY 2021. Based on the current Wesfarmers share price, this represents an attractive forward 3.1% dividend yield.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. 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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