2 quality ASX dividend shares to buy this month

Super Retail Group Ltd (ASX:SUL) and this ASX dividend share could be great options for income investors. Here’s why they are rated highly…

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With savings accounts and term deposits still offering ultra low interest rates, the share market continues to be the best place to earn a passive income.

However, with so many dividend shares to choose from, it can be hard to decide which ones to buy. To narrow things down, I’ve picked out two that come highly rated:

Super Retail Group Ltd (ASX: SUL)

Super Retail is the name behind retail store brands BCF, Macpac, Rebel, and Super Cheap Auto.

Collectively, its businesses have been in fine form during the pandemic. This culminated in Super Retail recently releasing its half year results and revealing a 23% increase in sales to $1.78 billion and a 139% increase in underlying net profit after tax to $177.1 million.

Management advised that this was underpinned by strong like for like sales growth across its store network and its an 87% jump in online sales.

Positively, the second half has started just as strongly. The company reported like for like sales growth of 30.5% during the first seven weeks of the half. This puts Super Retail in a position to deliver a bumper profit result in August.

Goldman Sachs is a fan of Super Retail. It currently has a buy rating and $15.00 price target on the company’s shares.

The broker also suspects that a special dividend could be coming with its full year results. In light of this, it is forecasting a a fully franked 81 cents per share dividend for FY 2021. Based on the current Super Retail share price, this represents a 6.9% yield.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is Transurban. It is one of the world’s leading toll road operators with a collection of key roads in Australia and North America.

Unlike Super Retail, Transurban has not been a positive performer during the pandemic. With traffic on its roads falling significantly during lockdowns, the company’s financial results were hit hard.

However, traffic levels are now improving and are expected to continue doing so as vaccines are rolled out across the world.

In light of this, it could be worth considering a long term and patient investment in the company’s shares. Especially given the quality of its roads, the time savings they offer, and their strong pricing power.

Macquarie is positive on the company. Earlier this month it put an outperform rating and $14.76 price target on its shares. The broker is also forecasting dividends of 40.5 cents per share and 60.4 cents per share in FY 2021 and FY 2022, respectively.

Based on the latest Transurban share price of $12.74, this will mean forward yields of 3.2% and 4.75% over the next two years.

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*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of Transurban Group. 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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