The good news for income investors in this low interest rate environment is that the Australian share market is home to plenty of shares offering generous yields.
Two that do just this are listed below. Here’s why they could be top options for income investors:
Charter Hall Social Infrastructure REIT (ASX: CQE)
The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust focused on social infrastructure properties.
Its growing portfolio comprises childcare centres, bus depots, and police and justice services facilities. Though, its main focus is on the former. In fact, it is Australia’s largest owner of early learning centres, actively partnering with 37 high quality childcare operators to provide an integrated service offering.
Demand for its properties has been strong, leading to an occupancy rate of 99.7% at the end of the first half. It also has great visibility on its future earnings thanks to its weighted average lease expiry (WALE) of over 14 years.
Goldman Sachs is a big fan and currently has a conviction buy rating and $3.84 price target on its shares. The broker believes it is well-placed for growth in the coming years, particularly given how almost 40% its rents are CPI linked. Goldman expects this to lead to distributions greater than 5% through to FY 2023.
Suncorp Group Ltd (ASX: SUN)
Another ASX dividend share to look at is Suncorp. The banking and insurance giant could be a top option for income investors due to its improving outlook. This is being driven by Australia’s strong economic recovery, which leaves this banking and insurance giant well-placed for growth.
The team at Citi are confident that this will lead to generous dividends for investors. Citi is forecasting dividends of 61 cents per share in FY 2021 (including a special dividend) and then 58 cents per share in FY 2022.
Based on the current Suncorp share price of $11.54, this implies fully franked yields of 5.3% and 5%, respectively, over the next two years. Citi currently has a buy rating and $11.80 price target on Suncorp’s shares.