These ASX dividend shares could help you beat low rates

Here’s why Sydney Airport Holdings Pty Ltd (ASX:SYD) and this ASX dividend share could help you beat low interest rates…

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A hand moves a building block from green arrow to red, indicating negative interest rates

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With interest rates at rock bottom levels and unlikely to improve in the near term, the share market looks set to remain the best place to generate a passive income.

Listed below are two popular ASX dividend shares that could be worth a closer look. Here’s what you need to know about them:

National Storage REIT (ASX: NSR)

The first ASX dividend share to look at is National Storage. It is one of the region’s largest self-storage providers. From its 200+ centres across Australia and New Zealand, the company tailors self-storage solutions to residential and commercial customers.

National Storage has been growing at a solid rate over the last decade thanks to a combination of organic and inorganic growth. This continued during the first half of FY 2021 when the company reported underlying earnings growth of 14% to $39.2 million.

This allowed the company to increase its FY 2021 earnings guidance to 8.1 cents to 8.5 cents per share, with 90% to 100% of this being paid out as distributions.

Based on this guidance and the current National Storage share price, this will mean a ~3.9% dividend yield in FY 2021.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The second ASX dividend share to look at is Sydney Airport. Although the airport operator is having a tough time because of the pandemic, traffic numbers continue to improve. And with vaccines rolling out across Australia and the globe, this trend looks set to continue.

One leading broker that believes it is worth being patient with Sydney Airport is Goldman Sachs. It currently has a buy rating and $6.73 price target on its shares.

In addition to this, the broker is forecasting a meaningful recovery in dividends in the near future. Goldman estimates that the company will pay 8.8 cents per share in FY 2021 and then 27.1 cents per share in FY 2022.

Based on the current Sydney Airport share price of $5.77, this will mean yields of 1.5% and 4.7%, respectively.

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Returns As of 15th February 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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