2 ASX dividend shares that could be buys in June 2021

ASX dividend shares could be interesting ideas in June 2021. One of those potential opportunities is Accent Group Ltd (ASX:AX1).

| More on:
fund manager standing on increasing tiles of bricks reaching for the stars

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In this era of low interest rates, ASX dividend shares could be the way to generate a higher level of income.

The Reserve Bank of Australia (RBA) has pushed the official Australian interest rate to almost 0%, which makes it hard to make much money from a bank account.

These two businesses are building reputations as ASX dividend shares:

Accent Group Ltd (ASX: AX1)

Accent has been steadily growing its dividend over the last few years as profit grows as well.

The company's CEO himself, Daniel Agostinelli, has said:

With long-term objectives and incentives linked to driving at least 10% compound earnings per share (EPS) growth, Accent continues to be defined by strong cash conversion and the consistently strong returns it delivers on shareholders' funds.

Accent said it has strong future growth initiatives through its online sales growth, new store rollouts across its different brands and new brands. Not only is it looking to increase its gross profit margins but it's trying to be more cost efficient too.

The shoe business saw pre-AASB-16 earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 44% to $97.5 million, earnings before interest and tax (EBIT) growth of 47.3% to $81.8 million and net profit after tax (NPAT) growth of 57.3% to $52.8 million.

It was that profit growth that allowed the ASX dividend share's board to increase the interim dividend by 52.4% to 8 cents per share.

For the first eight weeks of the second half of FY21, the like for like (LFL) retail sales across the whole network was up 10.7%.

According to Commsec, Accent Group is expected to pay a grossed-up dividend yield of 6.4% for FY21.  

Rural Funds Group (ASX: RFF)

Rural Funds is a fairly different real estate investment trust (REIT) compared to most others in the industry. It owns a portfolio of farming assets rather than retail, office or industrial properties.

It owns agricultural real estate in various sectors – cattle, almonds, macadamia, vineyards and cropping (sugar and cotton).

Rural Funds has a target of growing its distribution by 4% per annum for unitholders. It achieves this through a combination of ways.

Rental increases built into the contracts with its high-quality tenants produce organic rental profit growth each year. Those rental increases are either a fixed 2.5% per annum, or linked to CPI inflation, with some having occasional market reviews.

Some of those strong tenants include Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Limited (ASX: SHV), Olam, JBS and Australian Agricultural Company Ltd (ASX: AAC).  

Another of the ways that Rural Funds can grow its rental profit is by re-investing some of its retained cash profit into improving its farms for the tenants. This can then make the ASX dividend share's farms worth more in capital value and lead to higher rent over time.

Rural Funds has a large water entitlements portfolio to ensure that tenants have access to the water they need. The water value is a sizeable part of the overall underlying Rural Funds value. 

Rural Funds has forecast a distribution of 11.73 cents per unit in FY22, which translates to a forward distribution of 4.75%.

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. 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.

More on Dividend Investing

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Dividend Investing

5 top ASX dividend shares to buy right now

Analysts think income investors should be loading up on these shares.

Read more »

Two adults and a child look happy as they walk through airport with child sitting on suitcase.
Dividend Investing

Will Qantas shares pay a dividend in 2024?

Will the dividends return this year? Let's find out.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Dividend Investing

2 market-leading ASX dividend stocks to buy in April

Analysts have put buy ratings on these market-leaders.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here's what you have to do

If you want to bag the latest VAS dividend, here's what you need to do.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Dividend Investing

Investing for passive income? Keep any eye out for that boosted Telstra dividend today!

If you own Telstra shares, keep an eye out for that juicy dividend payout today.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Invest $12,000 in Woodside stock and get $5,700 in passive income

Reliable dividend shares are everywhere on the ASX. Here's how you could use that to your advantage.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
Dividend Investing

3 ASX 300 dividend shares to buy in April

These shares have been named as buys by brokers and tipped to offer very attractive yields.

Read more »