2 ASX shares tipped to pay bumper dividends in 2021

These ASX shares could be rewarding shareholders handsomely in 2021…

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Dividend stocks represented by paper sign saying dividends next to roll of cash

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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.

But which ASX dividend shares should you consider buying? Two to look closely at are listed below:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The Charter Hall Social Infrastructure REIT is a real estate investment trust focused on social infrastructure properties. These include specialist use properties with low substitution risk such as childcare centres and government sites.

At the end of the first half of FY 2021, the company had an occupancy rate of 99.7% and a weighted average lease expiry (WALE) of 14 years. This helped drive solid earnings growth during the half, allow the Charter Hall Social Infrastructure REIT board to increase its fully year distribution guidance to 15.7 cents per share for FY 2021.

Based on the current Charter Hall Social Infrastructure REIT share price, this will mean a yield of 4.5% for investors.

Goldman Sachs currently has a buy rating and $3.45 price target on its shares.

Fortescue Metals Group Limited (ASX: FMG)

Another dividend share to look at is Fortescue. It is one of the world’s largest producers of iron ore, with a number of operations across the Pilbara region in Western Australia.

Fortescue has been tipped to reward shareholders with very generous dividends in the near term thanks to the sky high iron ore price, which has just surpassed US$210 a tonne. This compares favourably to its C1 costs guidance of US$13.50 to US$14.00 per wet metric tonne. And while its lower grade product won’t command the full iron ore price, it will still be generating significant profits on each tonne.

Ord Minnett is very positive on the company and is forecasting fully franked dividends of $3.36 per share in FY 2021 and $2.93 per share in FY 2022. With the Fortescue share price currently fetching $22.65, this will mean massive dividend yields of 14.8% and 12.8%, respectively.

Its analysts have a buy rating and $28.00 price target on the company’s shares.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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