Fortunately, in this low interest rate environment, there are countless dividend shares for investors to choose from on the Australian share market.
But with so many to choose from, it can be hard to decide which ones to buy over others. To narrow things down for you, I have picked out two ASX dividend shares brokers think income investors should buy:
Medibank Private Ltd (ASX: MPL)
According to a note out of Credit Suisse, its analysts have retained their outperform rating and lifted their price target on this private health insurance company’s shares to $3.50. The broker made the move after increasing its earnings estimates to reflect positive investment market movements and improving trading conditions in the private health insurance industry.
As for dividends, Credit Suisse expects 13 cents per share in FY 2021 and then 14 cents per share in FY 2022. Based on the latest Medibank share price of $3.25, this implies attractive fully franked yields of 4% and 4.3%, respectively, for investors over the next couple of years.
National Australia Bank Ltd (ASX: NAB)
A note out of Macquarie reveals that its analysts have upgraded this banking giant’s shares to an outperform rating with a $28.00 price target. According to the note, the broker upgraded its shares on valuation grounds following a period of underperformance. In addition to this, the broker notes that NAB has a strong capital position. It feels this should allow NAB to absorb any negative impacts of the AUSTRAC investigation and a potential economic slowdown.
In respect to dividends, Macquarie is forecasting fully franked dividends of $1.20 per share in FY 2021 and then $1.25 per share in FY 2022. Based on the latest NAB share price of $26.32, this will mean generous yields of 4.6% and 4.75%, respectively, for income investors over the next two years.