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 consider is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust that has a focus on social infrastructure properties.
Demand for its properties has been very strong, leading to the company recently reporting a sky high occupancy rate of 99.7%. Positively, these tenants won't be leaving any time soon. Charter Hall Social Infrastructure REIT's weighted average lease expiry (WALE) stood at a sizeable 14 years at the end of the first half. Another positive is that the number of leases on fixed rent reviews has increased to 63.3%, which bodes well for its future rental income growth.
In light of its strong form in FY 2021, the company intends to pay a 15.7 cents per unit distribution. Based on the current Charter Hall Social Infrastructure share price, this represents a 4.8% yield.
One broker that is a fan is Goldman Sachs. This morning the broker retained its conviction buy rating and lifted its price target to $3.60. It commented: "We believe the current pricing provides an attractive investment opportunity. CQE is currently trading at an 8% premium to its NTA versus its historical average premium of 13% (since 2014). Moreover, it is trading at a 37% discount to its peer ARF versus its historical spread of a 12% discount."
Super Retail Group Ltd (ASX: SUL)
Another ASX dividend share to look at is Super Retail. It is the retail conglomerate behind the BCF, Macpac, Rebel, and Super Cheap Auto brands. Like the Charter Hall Social Infrastructure REIT, it has been a positive performer in FY 2021.
During the first half of FY 2021, it reported a 23% increase in half year sales to $1.78 billion and a 139% increase in underlying net profit after tax to $177.1 million. It then followed this up with a trading update which recently revealed like-for-like sales growth of 28% for the first 44 weeks of FY 2021.
Goldman Sachs is also a fan of Super Retail. It currently has a buy rating and $15.00 price target on its shares. Goldman is forecasting an 84 cents per share fully franked dividend in FY 2021. Based on the current Super Retail share price of $11.97, this represents a 7% yield.
