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Rates could be on hold for years so buy these excellent ASX dividend shares

Rolled up notes of Australia dollars from $5 to $100 notes
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According to the latest Westpac Banking Corp (ASX: WBC) Weekly economics report, the banking giant continues to forecast the cash rate staying on hold until at least the end of 2022. However, it could be much longer based on its estimates for unemployment and inflation.

Chief Economist Bill Evans said: “Markets will focus on the revised forecast for the path of the unemployment rate following the sharp improvement in the recent data. There is likely to be a downward recalibration in the RBA’s forecast path for the unemployment rate but the Bank also appears to have lowered its estimates of the full employment rate.”

“The net effect will be consistent policy guidance that it will still be some time – 2024 at the earliest – before the Bank expects to achieve its full employment and inflation targets. The faster likely improvement in the labour market will be offset by the more challenging target for the full employment rate,” he concluded.

While this is disappointing for income investors, all is not lost. The Australian share market is home to a number of quality companies that offer attractive dividend yields.

But which dividend shares should you buy? Here are two that come highly rated right now:

Accent Group Ltd (ASX: AX1)

Accent is a leading leisure footwear-focused retailer that owns a number of popular retail store brands. It has been growing its earnings and dividend at a solid rate for years and appears well placed to continue this trend. 

Bell Potter is positive on the company and has a buy rating and $2.65 price target on its shares. It is forecasting dividends of 11.9 cents per share in FY 2021 and 12.2 cents per share in FY 2022. This will mean fully franked yields of 5% and 5.1%, respectively, over the next two years.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to consider buying Coles. This supermarket operator looks well-placed for growth over the 2020s thanks to its strong market position, Refreshed Strategy, and focus on automation.

Goldman Sachs is a fan of the company. Its analysts currently have a buy rating and $20.70 price target on its shares. Goldman is forecasting dividends of 62 cents per share in FY 2021 and a 67 cents per share in FY 2022. Based on the current Coles share price of $15.56, this represents fully franked yields of 4% and 4.3%, respectively.

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Returns As of 15th February 2021

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Accent 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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