According to the latest cash rate futures, the market has priced in a 75% probability of the Reserve Bank of Australia cutting the cash rate down to zero next month.
Whether this happens or not, time will tell. But one thing that appears more certain is that the days of generous interest rates are some time away.
In light of this, the share market looks set to be the best place to earn a passive income for a while yet.
But which ASX dividend shares should you buy? Here are two to consider next week:
Bravura Solutions Ltd (ASX: BVS)
Bravura is a wealth management and transfer agency software solution provider with a number of popular solutions that are being used by large financial institutions. These include its key Sonata wealth management platform, the Rufus transfer agency solution, the Garradin back office solution, and the Midwinter financial planning solution.
Unfortunately, the company has been facing significant headwinds over the last 12 months due to Brexit and COVID-19. However, management appears confident these are short term headwinds and that its growth will resume once the situation eases.
Goldman Sachs agrees with this view and believes the weakness in the Bravura share price is a buying opportunity. It has a buy rating and $4.50 price target on its shares and is forecasting a 10.6 cents per share dividend in FY 2021. Based on the latest Bravura share price, this represents a 3.6% dividend yield.
Wesfarmers Ltd (ASX: WES)
Another option to consider is Wesfarmers. In contrast to Bravura, this conglomerate has been a very positive performer over the last 12 months. This is thanks largely to its key Bunnings business which has been experiencing strong sales growth during the pandemic as consumers redirect their spending from holidays to home improvements.
Pleasingly, Bunnings has been tipped to continue its positive form over the coming years, especially given tax cuts and government stimulus. This should be supported by growth in other businesses such as Kmart, Target, and Catch.
Credit Suisse is positive on the company and has an outperform rating and $55.83 price target on its shares. The broker is also expecting a $1.90 per share fully franked dividend this year. Based on the latest Wesfarmers share price, this will mean a 3.8% dividend yield.