2 buy-rated ASX dividend shares with 5%+ yields

These dividend shares are expected to provide generous yields…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

On Tuesday, the Reserve Bank once again kept the cash rate on hold at a record low and doesn't look to be in a rush to increase rates. This could mean that income investors will have to contend with low interest rates for some time to come.

But don't worry because there are plenty of quality dividend shares on the Australian share market that can help you overcome low rates.

But which dividend shares could be top options? Here are two that are rated as buys:

large goklden symbol of 5% representing yield of dividend shares

Image source: Getty Images

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX dividend share to look at is ANZ. This banking giant has returned to form in FY 2021, reporting a 28% increase in first half cash earnings to $2,990 million.

And while the recent lockdowns are a concern for the economy, the banks don't appear to be fazed by this. In fact, ANZ has such confidence in the strength of its business that it announced a $1.5 billion capital return recently. It also hinted that there could be more returns in the future once the uncertainty eases.

Morgans is very positive on ANZ and currently has an add rating and $34.50 price target on its shares.

The broker is also forecasting fully franked dividends of 145 cents per share in FY 2021 and 165 cents per share in FY 2022. Based on the latest ANZ share price of $28.01, this represents yields of 5.2% and 5.9%, respectively.

Mineral Resources Limited (ASX: MIN)

Another ASX dividend share to look at is Mineral Resources. This mining and mining services company has been a very strong performer in FY 2021 thanks to its focus on two hot commodities – iron ore and lithium.

Thanks to this exposure, the team at Macquarie expect Mineral Resources to pay very generous dividends in the near term. A note from earlier this week reveals that Macquarie is forecasting fully franked dividends of $3.16 per share in FY 2021 and then $3.04 per share in FY 2022.

Based on the current Mineral Resources share price of $60.14, this will mean yields of 5.2% and 5.1%, respectively. Macquarie has an outperform rating and $75.00 price target on its shares.

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.

More on Dividend Investing

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

2 monthly income ETFs with yield reaching as high as 9%

These ASX EFTs pay their investors every single month.

Read more »

$50 dollar Australian notes in the back pocket of jeans, representing dividends.
Dividend Investing

3 ASX dividend shares yielding 9% (or more)

These dividend-paying shares offer a great yield and potential for growth.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
Dividend Investing

2 ASX dividend shares with yields above 7%

Large yields and potential capital growth. What’s not to love?

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Dividend Investing

These buy-rated ASX dividend stocks are forecast to pay 6%+ yields in 2027

Analysts have buy ratings on these high-yield stocks. Let's see what they offer.

Read more »

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Dividend Investing

3 ASX dividend shares to double up on right now

Analysts have buy ratings on these top income stocks.

Read more »

Man holding out $50 and $100 notes in his hands, symbolising ex dividend.
Dividend Investing

Passive income investors: This ASX stock has an 8% yield and monthly payouts

The shares climbed higher on Tuesday.

Read more »

Happy woman working on a laptop.
Dividend Investing

A top ASX dividend stock to buy on a pullback

With a strong track record and steady dividends, this stock would be very attractive at cheaper prices.

Read more »

A mother helping her son use a laptop at the family dining table.
Dividend Investing

3 of the safest ASX 200 dividend stocks in Australia

For investors seeking dependable dividends, these ASX 200 shares could provide a strong foundation for long-term income.

Read more »