Although the outlook for interest rates is becoming increasingly positive, it is still likely to be some time before rates are at a sufficient level for income investors. In light of this, ASX dividend shares could remain very important for income investors in the near term.
But which dividend shares could be top options? Two strong shares to consider are listed below. Here's what you need to know about them:
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Coles Group Ltd (ASX: COL)
The first ASX dividend share for investors to consider is retail giant, Coles.
Thanks to its huge network of supermarkets, liquor stores, and express stores and long track record of delivering same store sales growth, Coles has been tipped to grow its dividend at a solid rate in the coming years.
For example, analysts at Citi are forecasting fully franked dividends of 65 cents per share in FY 2022 and then 72 cents per share in FY 2023. Based on the current Coles share price of $18.29, this will mean yields of 3.6% and 3.9% respectively.
Citi has a buy rating and $19.30 price target on its shares.
South32 Ltd (ASX: S32)
Another ASX dividend share that has been named as a buy is this mining giant.
Thanks to strong demand for commodities such as aluminium and the recent acquisition of a stake in the Sierra Gorda copper mine in Chile, South32 has been tipped to generate strong free cash flow and pay big dividends in the coming years.
Goldman Sachs expects South32 to pay fully franked dividends per share of 30 US cents in FY 2022 and 49 US cents in FY 2023. Based on the current South32 share price of $5.12 and the latest exchange rates, this will mean very attractive yields of 7.9% and 12.8%.
Goldman has a conviction buy rating and $5.80 price target on the miner's shares.
