It looks as though interest rates are going to remain at low levels for many years to come. But don't worry because dividend shares remain a great way to earn a passive income.
But which dividend shares should you buy? Two quality options are listed below:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
With the outlook for the banks improving greatly, now could be a good time to invest in ANZ if you don't already have exposure to the sector.
Especially with the booming housing market and the relaxing of responsible lending rules. This should support mortgage loan growth in the near term.
Another positive is the removal of dividend payment restrictions by APRA. This is likely to lead to some generous dividend payments over the coming years. Especially given ANZ's strong capital position.
Morgans is a fan of the banks and expects this to be the case. Last week it named ANZ its preferred pick in the sector and put an add rating and $33.50 price target on its shares.
The broker is forecasting a $1.54 per share dividend in FY 2021 and a $1.75 per share dividend in FY 2022. Based on the current ANZ share price of $28.95, this represents fully franked yields of 5.3% and 6%, respectively.
Wesfarmers Ltd (ASX: WES)
Another dividend option to consider is this conglomerate. Wesfarmers has been a very positive performance during the pandemic, with the majority of its businesses reporting sales and profit growth.
This led to a very strong first half performance, which saw Wesfarmers deliver a 16.6% increase in revenue to $17,774 million and a 25.5% jump in net profit after tax to $1,414 million.
Goldman Sachs was pleased with this result and appears to be expecting more of the same in the second half.
As a result, the broker has put a buy rating and $59.70 price target on its shares. Goldman is also forecasting a fully franked dividend of $1.88 per share in FY 2021 and $1.98 per share in FY 2022.
Based on the latest Wesfarmers share price of $54.60, this represents attractive 3.45% and 3.6% yields, respectively.
