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 not 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:
Accent Group Ltd (ASX: AX1)
Accent is a retail group with a collection of popular footwear-focused store brands. These include stores such as Glue Store, HYPEDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot.
But it may not stop there. Accent isn’t afraid to test the waters with new ideas and has recently launched another new store brand called 4 Workers. Based on past launches, if this is a success management is likely to throw capital behind the brand and expand its store network over the coming years.
This strategy has been a major success over the last decade and has underpinned solid earnings and dividend growth.
One broker that expects this positive form to continue is Bell Potter. It currently has a buy rating and $3.30 price target on its shares. The broker is also forecasting dividends of 11.7 cents per share in FY 2021 and 12.3 cents per share in FY 2022.
Based on the latest Accent share price of $2.73, this represents fully franked yields of 4.3% and 4.5%, respectively.
Suncorp Group Ltd (ASX: SUN)
Another dividend share to look at is Suncorp. Like Accent, it works through a number of leading brands such as AAMI, Apia, Bingle, GIO, Shannons, Vero, and the eponymous Suncorp brand. For over a century the company has been building futures and protecting what matters by offering insurance, banking, and wealth products and services.
During this time Suncorp has built up a significant market position, making it one of the main forces in the industry in Australia. This puts it in a great position to benefit from the industry’s improving trading conditions and positive outlook.
Goldman Sachs is very positive on the company’s future and recently retained its buy rating and lifted its price target to $12.08. It is also forecasting generous dividend payments over the coming years.
Goldman is expecting the company to reward shareholders with fully franked dividends per share of 60 cents in FY 2021, 57 cents in FY 2022, and then 69 cents in FY 2023. Based on the current Suncorp share price of $11.54, this will mean yields of 5.2%, 4.9%, and 6%, respectively.