With savings accounts and term deposits still offering very low interest rates, the share market arguably remains 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 help narrow things down, I've picked out two that are highly rated right now:
Charter Hall Social Infrastructure REIT (ASX: CQE)
The first ASX dividend share to look at is Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure properties. These include childcare centres and government properties.
Due to its properties being for specialist use, with limited competition and low substitution risk, Charter Hall Social Infrastructure REIT is able to command long tenancy agreements. This led to the company finishing the first half of FY 2021 with a weighted average lease expiry (WALE) of 14 years.
Another positive is the strong demand it is experiencing for its properties. At the end of the period, the company's occupancy rate stood at a sky high 99.7%.
This helped underpin solid earnings and dividends growth for the half, with more of the same expected in the second. As a result, it increased its distribution guidance to 15.7 cents per share for FY 2021. Based on the current Charter Hall Social Infrastructure share price, this represents a 5.1% yield.
Goldman Sachs is positive on the company and currently has a conviction buy rating and $3.45 price target on its shares.
Super Retail Group Ltd (ASX: SUL)
Another dividend share to consider buying is Super Retail. In February, this retail conglomerate released its half year results and revealed strong growth across the company.
Super Retail reported a 23% increase in sales to $1.78 billion and a massive 139% increase in underlying net profit after tax to $177.1 million. This strong form allowed the Super Retail board to declare a fully franked interim dividend of 33 cents per share.
Goldman Sachs is also a fan of Super Retail and appears to believe more of the same is coming in the second half. So much so, it suspects that the company may be in a position to reward shareholders with a special dividend.
The broker is forecasting a dividend of ~81 cents per share in FY 2021. Based on the current Super Retail share price, this equates to a fully franked 6.9% yield.
Goldman Sachs has a buy rating and $15.00 price target on its shares.
