2 ASX dividend shares for income investors

Westpac Banking Corp (ASX:WBC) and this ASX dividend share could be good options in this low interest rate environment…

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The good news for income investors right now is that the Australian share market is home to a large number of shares with generous dividend yields.

For example, two dividend shares that provide investors with yields that smash savings accounts and term deposits are listed below:

National Storage REIT (ASX: NSR)

The first dividend share to look at is National Storage. It is one of the ANZ region's leading self-storage operators and has been growing at a solid rate over the last few years. This has been driven largely by its strong position in a fragmented market and its growth through acquisition strategy.

Pleasingly, its performance has remained solid this year despite the pandemic. At its annual general meeting, management revealed that it expects to report underlying earnings per share of 7.7 cents to 8.3 cents in FY 2021. It also advised that it intends to pay 90% to 100% of its earnings out to shareholders as distributions.

Based on the middle of both ranges and the current National Storage share price, this represents a 4% yield.

Westpac Banking Corp (ASX: WBC)

The banking sector may have been on fire in the final quarter, but a number of brokers still see plenty of gains and generous dividends ahead. Especially now worst of the pandemic is behind us and responsible lending rules have been eased.

In addition to this, APRA's recent decision to scrap its dividend restrictions is a win for shareholders and should see payout ratios increasing in the coming periods. It did this after stress testing the banking sector and finding it able to withstand even the most shocking economic downturn. 

Another positive is the housing market, which has been improving greatly in recent month. So much so, house prices have been tipped to hit record highs this year. This could give home loans a boost in 2021.

One broker that is positive on Westpac is UBS. It currently has a buy rating and $22.00 price target on its shares. It is also forecasting a 100 cents per share fully franked dividend in FY 2021. Based on the Westpac share price, this represents a 5.15% dividend yield.

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