Beat low interest rates with these top ASX dividend shares

Telstra Corporation Ltd (ASX:TLS) and this ASX dividend share could help you beat low interest rates…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earlier this month the Reserve Bank of Australia kept the cash rate on hold at a record low of 0.1%.

Unfortunately, it could be a long time until interest rates move higher from here, let alone back to normal levels.

In light of this, income investors look set to be better off sticking with dividend shares instead of term deposits or savings accounts.

But which dividend shares should you buy? Two top dividend to consider buying are listed below. Here's why they could be great options in this low interest rate environment:

ASX dividend shares represented by cash in jeans back pocket

Image source: Getty Images

National Storage REIT (ASX: NSR)

The first option to consider is National Storage. This self-storage operator appears well-positioned to grow its income and distribution at a solid rate over the long term.

This is thanks to its strong position in a fragmented market, its growth through acquisition strategy, and the booming housing market. The latter traditionally results in strong demand for its units.

In addition to this, an increasing number of small businesses are using its storage units for non-traditional uses such as running their ecommerce businesses. This is made possible thanks to supplied Wi-Fi, shelving, power connectivity, and packaging supplies.

Based on the current National Storage share price and its guidance for FY 2021, its shares currently offer a forward 3.5% distribution yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share for income investors to consider is Telstra. The telco giant could be a quality option due to its improving outlook and attractive valuation.

In respect to the former, thanks to a combination of cost cutting, rational competition, and a positive growth outlook in the mobile business, Telstra appears well-placed to return to growth from FY 2022. This should be boosted further by its separation and asset monetisation plans.

In light of the above, Morgan Stanley is forecasting a 16 cents per share fully franked dividend for FY 2021 and FY 2022. This represents a generous 4.7% dividend yield.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

Three business people join hands in strength and unity.
Dividend Investing

The reliable ASX dividend shares I'd buy with $10,000

Building passive income starts with the right foundations. Here are three ASX shares I would consider today.

Read more »

Smiling man holding Australian dollar notes, symbolising dividends.
Bank Shares

Here's the dividend forecast out to 2028 for NAB shares

Can NAB shareholders bank on dividend growth in the coming years?

Read more »

Woman smiling with her hands behind her back on her couch, symbolising passive income.
Dividend Investing

1 ASX dividend stock down 22% I'd buy right now

It could be a great time to invest in this leading business.

Read more »

Happy retirees celebrate with wine over lunch.
Dividend Investing

2 ASX dividend shares I'm betting on big-time to fund my retirement

I believe high-quality dividend stocks are worth their weight in gold.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Dividend Investing

2 of the best ASX dividend shares to buy in April

Analysts think these shares are among the best to buy now for income investors.

Read more »

Busy freeway and tollway at dusk
Dividend Investing

An ASX dividend stock I'd hold no matter what

For reliable income and resilience this $43 billion share is a true buy-and-hold.

Read more »

Man holding fifty Australian Dollar banknotes in his hands, symbolising dividends.
Dividend Investing

3 top ASX dividend share buys for passive income in April

These are my top picks for dividends right now.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Broker Notes

Are CBA shares still a good buy for passive income?

A leading analyst delivers his verdict on CBA’s passive income appeal.

Read more »