Interest rates may be at ultra-low levels, but all is not lost. The Australian share market is home to a large number of shares offering yields that are vastly superior to savings accounts and term deposits.
Two buy-rated ASX dividend shares to consider are listed below. Here's what you need to know about them:
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Carsales.Com Ltd (ASX: CAR)
The first ASX dividend share to look at is Carsales. This auto listings company has been growing at a consistently solid rate over the last decade.
Pleasingly, this has continued in FY 2021. Carsales recently provided guidance for revenue of $433 million to $437 million and adjusted net profit after tax of $149 million to $153 million. The latter represents an 8% to 11% year on year increase.
Looking ahead, the company appears well-placed for growth thanks to its domination of the ANZ market and its growing international operations. The latter will soon be bolstered with its expansion into the United States via an acquisition.
Morgans is a fan of the company. It recently put an add rating and $20.82 price target on its shares. The broker is also forecasting dividends of 56 cents per share in FY 2021 and 59 cents per share in FY 2022. Based on the current Carsales share price, this will mean fully franked yields of 2.9% and 3.1%, respectively.
Westpac Banking Corp (ASX: WBC)
Another option that is highly rated by analysts is Westpac. After a tough few years because of the Royal Commission and the pandemic, Australia's oldest bank is bouncing back very strongly.
For example, during the six months ended 31 March, Westpac reported cash earnings of $3,537 million. This was a massive 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020.
Thanks to this strong form and the removal of dividend restrictions, the Westpac board was able to increase its fully franked interim dividend to 58 cents per share.
Morgan Stanley is expecting more of the same from the bank in the second half and FY 2022. The broker is forecasting fully franked dividends of $1.18 per share and $1.25 per share over the next two years. Based on the latest Westpac share price, this will mean yields of 4.5% and 4.7%.
It has an overweight rating and $29.20 price target on the bank's shares.
