Fortunately, in this low interest rate environment, the share market is home to plenty of shares offering generous yields.
For example, two ASX blue chip shares that have prospective yields of over 5% are listed below. Here's what you need to know about them:
BHP Group Ltd (ASX: BHP)
BHP is one of the world's largest and highest quality miners in the world. The Big Australian has a collection of world class, low cost assets across a diverse range of commodities which continue to generate significant free cash flows. This certainly is the case for its iron ore and copper operations, which are benefiting greatly from sky high prices.
One broker that is expecting bumper free cash flows from BHP in FY 2021 is Macquarie. And the good news for shareholders is that its analysts expect the majority of this to be returned to shareholders via dividends. Macquarie is forecasting a full year dividend of approximately $2.80 per share. Based on the current BHP share price, this would mean a massive fully franked 7.7% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
This telco giant has been in the news this week after announcing plans to split its business into three separate entities. This will comprises InfraCo Fixed, InfraCo Towers, and ServeCo. Management believes the restructure would enable the company to take advantage of potential monetisation opportunities for its infrastructure assets, which could create additional value for shareholders.
This plan has gone down well with investors and also with brokers. For example, Goldman Sachs has reiterated its buy rating and $3.60 price target on the company's shares. It has also reaffirmed its forecast for a 16 cents per share fully franked dividend in FY 2021 and beyond. Which, based on the current Telstra share price, would provide investors with a 5.2% dividend yield.
