With interest rates likely to remain at very low levels for some time to come, it looks like dividend shares will be the best place to generate a passive income for a while yet.
But which ASX dividend shares should you look at? Here are two to consider:
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Accent Group Ltd (ASX: AX1)
The first dividend share to look at is Accent. It is a footwear-focused retailer which owns a collection of popular store brands. These include HypeDC, Platypus, and The Athlete's Foot.
Accent has been growing at a consistently solid rate over the last few years. This strong form has been driven by new store brand launches, the expansion of its existing footprint, and growing demand in-store and online.
Pleasingly, FY 2021 has been no different, with Accent on course to deliver a stellar profit result in August. During the first half, the company achieved a 6.6% increase in total sales to $541.3 million and a 57.3% increase in net profit after tax to $52.8 million.
Bell Potter is confident on Accent's outlook and has put a buy rating and $2.65 price target on its shares.
The broker is also forecasting an 11.9 cents per share dividend in FY 2021. Based on the current Accent share price, this will mean a fully franked 4.7% yield.
Telstra Corporation Ltd (ASX: TLS)
A second ASX dividend share to look at is Telstra. While the telco giant has been a disaster for income investors over the last five years, it finally appears to have turned a corner.
This is thanks to its T22 strategy which is creating a much leaner business and one which is expected to return to growth as soon as next year.
Telstra's CEO, Andy Penn, explained: "I am confident the many initiatives we have taken under our T22 program, particularly in simplifying the business and the digitisation program, will further improve customer experience."
"To get the real benefits from all the effort we've already made, Telstra needs to be bold. I've set an aspiration for mid to high single-digit growth in underlying EBITDA in FY22 and $7.5 to $8.5 billion of underlying EBITDA in FY23. I am confident we can deliver this if we remain focused," he added.
Goldman Sachs is a fan and feels the Telstra share price is good value. It currently has a buy rating and $4.00 price target on its shares.
The broker also believes that its dividend cuts are over and is forecasting a 16 cents per share dividend for the foreseeable future. Based on the latest Telstra share price, this represents a fully franked 4.7% dividend yield.
