With the interest rates on term deposits and savings account at such low levels, it has become almost impossible to generate a sufficient passive income from these assets.
The good news is that there are a large number of ASX dividend shares that provide generous yields. Two dividend shares to look at are listed below:
Charter Hall Social Infrastructure REIT (ASX: CQE)
Charter Hall Social Infrastructure REIT is a real estate investment trust that invests in social infrastructure properties. It targets ongoing capital growth by focusing on assets in strategic locations with specialist use, limited competition, low substitution risk, and high underlying land values.
Management expects this strategy to drive high tenant retention rates and income growth over the long term.
One broker that is a fan of the Charter Hall Social Infrastructure REIT is Goldman Sachs. It has a conviction buy rating and $3.35 price target on its shares.
The broker is forecasting a 15 cents per share dividend in FY 2021. Based on the latest Charter Hall Social Infrastructure REIT share price, this represents a 4.8% yield.
Westpac Banking Corp (ASX: WBC)
Things certainly are looking a lot more positive for the big four banks right now after a difficult 2020. COVID-related loan deferrals have fallen to low levels, house prices are rising, mortgage loan growth is tipped to be strong in 2021, and responsible lending rules have been relaxed.
And making the banks even more attractive for investors is APRA’s recent decision to allow unrestricted dividend payments. This is expected to lead to higher payout ratios in 2021 and generous yields from the banks.
Morgans, for example, is now forecasting a $1.24 per share fully franked dividend from Westpac in FY 2021. Based on the current Westpac share price, this represents a 5.7% yield. Morgans has an add rating and $23.50 price target on its shares.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
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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