Although the outlook for interest rates is improving, it is likely to be some time until rates reach former levels. This could mean dividend shares remain one of the best places to earn a passive income for some time to come.
Two ASX dividend shares with attractive yields are listed below. Here's what you need to know about them:
National Storage REIT (ASX: NSR)
The first dividend share to look at is this leading self-storage operator. Thanks to its successful growth through acquisition strategy, National Storage has been growing at a solid rate over the last decade.
And while the company has now amassed a portfolio of over 210 centres, its growth looks unlikely to stop there. Management continues to see scope to grow its network further in a fragmented industry.
At National Storage's AGM, Chairman Laurence Brindle commented: "The ownership of self storage centres remains highly fragmented, and we are confident that this pipeline of high-quality storage centres will continue to create acquisition opportunities for the foreseeable future."
This is likely to bode well for its distribution growth over the long term. For now, though, the company is forecasting at least 10% earnings per share growth in FY 2022. If its distribution grows at the same rate, it will mean a distribution of 9.02 cents per share.
Based on the current National Storage share price of $2.38, this would mean a yield of 3.8%.
Rural Funds Group (ASX: RFF)
Another ASX dividend share to look at is Rural Funds. It is an agricultural real estate investment trust (REIT) that owns a diversified portfolio of Australian agricultural assets which are leased predominantly to corporate agricultural operators. These include ASX-listed companies such as Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).
Rural Funds has also just added to its portfolio through the acquisition of cattle and cropping properties in central Queensland and macadamia orchards elsewhere in Queensland.
These acquisitions are consistent with its strategy of acquiring assets with potential for productivity improvements, in agricultural sectors in which it has operating experience and Australia has a comparative advantage. This strategy has been very successful in the past and underpins the company's plan to grow its distribution by 4% each year.
Pleasingly, management confirmed that this remains the case in FY 2022, with Rural Funds intending to increase its distribution by 4% to 11.73 cents per share. Based on the current Rural Funds share price of $2.84, this represents an attractive yield of 4.1%.
