2 buy-rated ASX dividend shares with generous yields

Analysts rate these dividend shares highly…

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ASX dividend shares represented by cash in jeans back pocket

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Are you interested in boosting your income portfolio with some new additions? Then below are two options to consider.

Here’s why these ASX dividend shares have been rated as buys:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

ANZ could be an ASX dividend share to consider. This is due to the increasingly positive outlook for the big four banks thanks to improving trading conditions and cost reductions. The latter sees the bank aiming to reduce its cost base to $8 billion by 2022.

In respect to improving trading conditions, you only need to look at ANZ’s recent half year results to see this. During the first half of FY 2021, ANZ reported a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020.

One broker that is positive on ANZ is Morgans. Its analysts currently have an add rating and $34.50 price target on its shares. It is forecasting fully franked dividends of 145 cents per share in FY 2021 and then 163 cents per share in FY 2022. Based on the latest ANZ share price of $27.85, this represents yields of 5.2% and 5.85%, respectively.

Scentre Group (ASX: SCG)

Another ASX dividend share that has been recently tipped as a buy is Scentre. This is due to its strong position in the retail market, improving trading conditions, and its exposure to inflation.

In respect to the latter, Goldman Sachs notes that Australian inflation expectations are currently at their highest level since 2015. This is a big positive for Scentre due to the company being far more positively leveraged to inflation than any other Australian real estate investment trust under the broker’s coverage.

Goldman estimates that 70%+ of its base rental income is subject to inflation-linked escalation, which bodes well in the current environment. The broker also highlights that higher inflation aids the profitability of its retailer tenancy base, which benefits from fixed cost leverage.

Its analysts have a buy rating and $3.46 price target on the company’s shares. Goldman is also forecasting dividends of 14 cents per share in FY 2021 and then 17 cents per share in FY 2022. Based on the latest Scentre share price of $2.86, will mean yields of 4.9% and 5.9%, respectively.

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*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks 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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