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.
But which dividend shares should you buy? Two that are highly rated are listed below. Here's what you need to know about them:
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Accent Group Ltd (ASX: AX1)
Accent is a footwear-focused retailer with a growing collection of store brands. These include the likes of HYPEDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete's Foot. The company has also just launched a new brand called 4 Workers last week.
Thanks to a combination of new store brand launches, the expansion of its existing footprint, and strong demand in-store and online, Accent has been growing very strongly in recent years.
Positively, this has continued in FY 2021. Last month the company released its half year result and reported a 6.6% increase in total sales to $541.3 million and a 57.3% lift in net profit after tax to $52.8 million. Pleasingly, this positive form continued early in the second half.
One broker that is a fan of the company is Bell Potter. It recently put a buy rating and $2.65 price target on its shares. Bell Potter is also forecasting an 11.9 cents per share dividend in FY 2021. Based on the current Accent share price, this will mean a fully franked 5% yield.
Westpac Banking Corp (ASX: WBC)
Westpac could be a great option for income investors that don't already have exposure to the banking sector. Especially given the bank's return to form in FY 2021 and its improving outlook.
In respect to its return to form, in February the bank released its first quarter update and reported a $1.97 billion first quarter cash profit. This was more than double the quarterly FY 2020 second half average cash earnings.
Westpac also revealed that it was reversing ~$500 million of COVID-19 related impairments due to the improving economic conditions. It also appeared to suggest that further impairment reversals could happen if conditions continue to improve.
Morgans was pleased with its update and put an add rating and $27.50 price target on its shares. The broker is also forecasting a fully franked $1.32 per share dividend in FY 2021. Based on the current Westpac share price, this represents a generous 5.4% dividend yield.
