You're certainly not alone if you're fed up with the low interest rates on offer with savings accounts and term deposits. The good news is that you can overcome these low rates by investing in ASX shares that pay dividends.
But which ASX dividend shares should you buy? Two that brokers love right now are listed below. Here's what you need to know:
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BHP Group Ltd (ASX: BHP)
The first ASX dividend share to look at is this mining giant. The Big Australian has been a strong performer over the last 12 months thanks to its solid production performance and favourable commodity prices.
In respect to the latter, the iron ore price has been a particularly positive performer. In fact, it recently broke through the US$200 a tonne level in recent weeks. This is materially higher than BHP's cost of production, which means its iron ore operations are generating bumper free cash flows right now.
The good thing about this is that due to its strong balance sheet and generous dividend policy, the majority of this free cash flow is likely to end up in shareholders' pockets.
One bullish broker is Macquarie. It currently has an outperform rating and $57.00 price target on its shares. It is also forecasting dividends per share of ~$3.46 and ~$2.93 over the next two years. Based on the current BHP share price of $48.27, this equates to fully franked yields of 7.3% and 6.2%, respectively.
Super Retail Group Ltd (ASX: SUL)
Another ASX dividend share to consider buying is Super Retail. It is a diversified retail company with a collection of popular brands – Super Cheap Auto, BCF, Macpac, and Rebel.
Like BHP, it is also on form in FY 2021. For example, during the first half of FY 2021, the company reported a 23% increase in sales to $1.78 billion and a 139% increase in underlying net profit after tax to $177.1 million. Underpinning this growth was solid like for like sales across the company, a favourable shift in consumer spending, and strong online sales. The latter increased 87% over the prior corresponding period to $237.4 million.
Pleasingly, its strong form has continued in the third quarter, setting the company up to deliver a stellar full year result in August.
Goldman Sachs is a fan of Super Retail. It has been impressed with its performance and recently reaffirmed its buy rating and $15.00 price target on its shares. The broker is also forecasting an 84 cents per share fully franked dividend in FY 2021 (including a special dividend). Based on the current Super Retail share price of $12.37, this represents a 6.8% yield.
