Fortunately, in this low interest rate environment, the Australian share market has a large number of dividend shares offering generous yields.
Two that tick a lot of boxes are listed below. Here's why these ASX dividend shares are highly rated:
Charter Hall Social Infrastructure REIT (ASX: CQE)
The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. As its name implies, this real estate investment trust has a focus on high quality social infrastructure properties. This means properties with specialist use, limited competition, and low substitution risk. These include childcare centres and government properties.
At the end of the first half, the company had an occupancy rate of 99.7% and a very lengthy weighted average lease expiry (WALE) of 14 years. Management also advised that the number of leases on fixed rent reviews has increased to 63.3%, which bodes well for its future rental income growth.
In addition to this, thanks to a strong first half, management upgraded its FY 2021 distribution guidance to 15.7 cents per unit. Based on the current Charter Hall Social Infrastructure share price, this represents a 5.3% yield.
Goldman Sachs currently has a conviction buy rating and $3.45 price target on its shares.
Wesfarmers Ltd (ASX: WES)
This conglomerate recently released its half year results and reported a 16.6% increase in revenue to $17,774 million. Driving this was solid sales growth across much of the company but particularly from its key Bunnings business.
The hardware giant recorded an impressive 24.4% increase in Bunnings revenue to $9,054 million. Underpinning this growth was government stimulus and consumers redirecting their spending from holidays to home improvements.
Positively, on the bottom line, stronger margins led to Wesfarmers delivering a 25.5% increase in net profit after tax to $1,414 million.
Goldman Sachs was happy with the result and believes its growth can continue. It has a buy rating and $59.70 price target on its shares.
Furthermore, the broker is forecasting a fully franked full year dividend of $1.88 per share. Based on the latest Wesfarmers share price, this equates to a 3.7% yield.
