With low interest rates likely to be here for some time to come, it certainly is a difficult time for income investors.
While this is disappointing, investors need to worry. This is because there are plenty of ASX dividend shares that can help you overcome low rates. Two to look at are listed below:
Coles Group Ltd (ASX: COL)
This supermarket giant could be a dividend share to consider buying. This is thanks to its very positive long term growth outlook, which is being underpinned by its strong market position, defensive qualities, and focus on cutting costs with automation. The latter has seen the company invest heavily in a new distribution centres with Ocado.
One leading broker that is a fan of Coles is Goldman Sachs. It recently put a buy rating and $19.40 price target on its shares. Based on the current Coles share price of $16.93, this implies potential upside of 14.5% over the next 12 months.
This potential return gets even better when you factor in the fully franked dividends of 62 cents per share in FY 2021 and then 67 cents per share in FY 2022 that Goldman is forecasting. These dividends currently represent yields of 3.7% and 3.9%, respectively, over the next two years.
National Storage REIT (ASX: NSR)
Another dividend share to look at is National Storage. It is one of the largest self-storage operators in the ANZ region with a network of over 200 centres. And while this is a large network, management doesn’t plan to stop at that.
The company continues to see room to expand its network in the future via its development projects and growth through acquisition strategy. In fact, the company recently raised $325 million to strengthen its balance sheet and replenish its investment capacity.
This is expected to underpin solid income and distribution growth over the next decade, especially given the booming housing market. Traditionally a thriving housing market leads to growing demand for its services as people move homes or downsize.
Analysts at Ord Minnett currently have an accumulate and $2.20 price target on the company’s shares. The broker is also forecasting dividends of 8.2 cents per share in FY 2021 and then 8.6 cents per share in FY 2022. Based on the latest National Storage share price of $2.04, this will mean yields of 4% and 4.2%, respectively.