2 blue chip ASX dividend shares to buy

Australia and New Zealand Banking GrpLtd (ASX:ANZ) and this blue chip ASX dividend share could be in the buy zone…

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It is looking very unlikely that interest rates will be going higher any time soon.

In light of this, the Australian share market looks set to be the best place to earn a passive income for the foreseeable future.

Thankfully there are plenty of options for income investors to choose from on the ASX. Two that could be worth considering are named below:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first dividend share to look at today is ANZ. While this banking giant's shares have rebounded strongly from their COVID lows, they are still trading materially lower than their pre-COVID highs.

And while trading conditions will remain challenging, the worst of the pandemic does appear to be comfortably behind us now. Combined with the relaxing of responsible lending rules and an improving housing market, the bank's outlook is looking significantly more positive in 2021 than last year.

In addition to this, APRA's confidence in the strength of the banking sector has just seen it remove dividend restrictions on the banks from 2021. This bodes well for income investors.

In fact, in response to this news, Morgans is now 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 5.6% and 6.6% dividend yields, respectively. Morgans has an add rating and $26.00 price target on its shares.

Wesfarmers Ltd (ASX: WES)

Wesfarmers has been a positive performer over the last 12 months thanks largely to its key Bunnings business. The hardware giant has been experiencing very strong sales growth during the pandemic as consumers redirect their spending from holidays to home improvements.

The good news is that with the government providing home improvement stimulus and tax cuts, Bunnings has been tipped to continue its positive form over the coming years. These same tailwinds are expected to support its other businesses, such as Kmart, Target, and Catch.

One broker that is positive on the company is Credit Suisse. Its analysts have an outperform rating and $55.83 price target on its shares.

The broker has also pencilled in a $1.90 per share fully franked dividend. Based on the latest Wesfarmers share price, this will mean a 3.75% dividend yield over the next 12 months.

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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