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2 reliable ASX dividend shares to buy

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If you’re looking for a source of income from the share market, then you might want to take a look at the reliable ASX dividend shares listed below.

Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to look at is Coles. Since spinning out of Wesfarmers Ltd (ASX: WES) in 2018, this supermarket operator has been a very positive performer. This was particularly the case in 2020 when Coles’ defensive qualities were on display for all to see.

Pleasingly, Coles has carried its strong form over into FY 2021, putting the company in a position to deliver a strong full year result in August.

And looking further ahead, thanks to its refreshed strategy, its focus on automation, and home brand growth, Coles appears well-positioned to build on this over the remainder of the 2020s.

Analysts at Citi are fans of the company and are expecting it to deliver a strong full year result in FY 2021. In light of this, the broker has a buy rating and $21.20 price target on its shares.

Citi is forecasting a 63.5 cents per share fully franked dividend this year. Based on the latest Coles share price, this equates to an attractive 3.5% dividend yield.

Rural Funds Group (ASX: RFF)

Rural Funds could be a dividend share to look closer at. It is a real estate investment trust which owns a diversified portfolio of high quality Australian agricultural assets.

These assets are leased to experienced agricultural operators such as Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE) on long term leases. And when I say long, I mean long. At the last count, Rural Funds reported a weighted average lease expiry of almost 11 years.

Within its leases, the company has rental increases built in. It is thanks partly to this that the company has an aim of delivering distribution growth of 4% per annum.

In line with this, Rural Funds intends to increase its distribution by this margin to 11.28 cents per share in FY 2021. Based on the latest Rural Funds share price, this works out to be a generous 4.6% yield.

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Returns As of 15th February 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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