Later today the Reserve Bank will meet to discuss the cash rate. While the outlook for rates is improving, it is still likely to be some time before the central bank brings rates up to a level that would allow income investors to generate a sufficient income from interest-bearing assets such as term deposits.
In light of this, the share market looks set to be the best place to earn a passive income for a little while to come. But which dividend shares should you consider buying? Listed below are two dividend shares analysts rate highly:
Adairs Ltd (ASX: ADH)
The first dividend share to look at is this furniture and homewares retailer. Its shares came under significant pressure last month following the release of a trading update which revealed that COVID headwinds had weighed heavily on its performance during the first half.
While the update and accompanying selloff were disappointing, the team at Morgans believe the latter has created a buying opportunity for investors.
The broker has put an add rating and $3.70 price target on its shares. This compares to the latest Adairs share price of $3.08. In addition, Morgans is now forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. This will mean yields of 6.2% and 8.45%, respectively.
Charter Hall Social Infrastructure REIT (ASX: CQE)
Another ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. This property company invests in properties such as government facilities, healthcare buildings, and childcare centres. These are properties that are in-demand and come with ultra-long leases.
In fact, so long are the leases, that Charter Hall Social Infrastructure REIT reported a weighted average lease expiry (WALE) in excess of 15 years in FY 2021. Combined with fixed rent reviews, this bodes well for rental growth and dividends over the next decade and a half.
Speaking of dividends, Goldman Sachs expects dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. Based on its current share price of $3.84, this implies yields of 4.4% and 4.5%, respectively. The broker currently has a conviction buy rating and $4.13 price target on its shares.
