2 ASX dividend shares with yields above 4%

Here's what you need to know about these dividend shares…

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Earlier this month, the Reserve Bank of Australia once again kept the cash rate on hold at a record low of 0.1%. While the outlook for rate increases is improving, it still looks likely to be a long time until rates return to "normal" levels.

In light of this, income investors could be better off sticking with dividend shares instead of term deposits or savings accounts. But which dividend shares should you buy? Two top dividend options to consider are listed below. Here's what you need to know about them:

Rural Funds Group (ASX: RFF)

The first ASX dividend share to look at is Rural Funds. It is an Australian agricultural property company with a portfolio of high quality assets that are leased to some of the biggest players in the agricultural sector on long term agreements.

A big positive about its leases are the fixed rental increases built into them. This means the company is well-positioned to grow its rental income at a consistently solid rate over the next decade. This gives management great visibility with its future earnings, leaving it well-placed to deliver on its distribution growth target of 4% per annum.

In FY 2022, Rural Funds intends to reward its shareholders with a distribution of 11.73 cents per share. This will be up 4% on FY 2021's distribution. Based on the current Rural Funds share price of $2.54 this will mean a yield of 4.6%.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share for income investors to consider is Telstra. This telco giant could be a good option due to its improving outlook and generous yield.

In respect to its outlook, due to a combination of cost cutting, rational competition, and a positive growth outlook in the mobile business from its 5G leadership, Telstra appears well-placed to return to growth potentially as soon as FY 2022. This should be boosted further by its separation and asset monetisation plans which are underway.

Earlier this month, analysts at Ord Minnett reiterated their buy rating and $4.10 price target. The broker continues to forecast 16 cents per share fully franked dividends for the foreseeable future.

Based on the current Telstra share price of $3.58, this will mean attractive yields of almost 4.5% over the coming years.

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 owns shares of and has recommended RURALFUNDS STAPLED and Telstra Corporation Limited. 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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