2 ASX dividend shares for income investors

Telstra Corporation Ltd (ASX:TLS) and this ASX dividend share have been rated as buys. Here's why analysts like them…

| More on:
ASX expensive defensive shares man carrying large dollar sign on his back representing high P/E ratio or dividend

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Here's why analysts have given them buy ratings:

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share to look at is Australia's largest telco, Telstra.

It certainly has been an eventful few years for Telstra. After several years of earnings and dividend declines, a return to growth is finally in sight for the company. This is being driven by the easing NBN headwind, significant cost cutting, and its leadership position in 5G internet.

In addition to this, the company is looking to split up the company and offload assets such as its towers. This is expected to unlock significant value for shareholders.

In light of the above, the dividend cuts appear to be over and 16 cents per share looks likely to be the bottom. Goldman Sachs is confident of this and is forecasting fully franked 16 cents per share dividends for the foreseeable future. Based on the current Telstra share price of $3.43, this will mean a 4.7% yield.

Goldman has a buy rating and $4.00 price target on the company's shares.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is Transurban. It is one of the world's leading toll road operators with 17 roads in Australia and four in North America. It also has a significant project pipeline across its networks that could support its growth in the coming years.

While traffic volumes have been lower because of the pandemic, they have been improving greatly. For example, during the month of March, Transurban's monthly traffic was down just 5% compared to the prior corresponding period. This was an improvement from an 11% decline in February. This trend is likely to continue as vaccines roll out and life returns to normal in its key markets.

Ord Minnett appears confident this will be the case and is expecting it to lead to a rebound in distributions in FY 2022. The broker is forecasting dividends of 37 cents per share in FY 2021 and then 58 cents per share next year. Based on the latest Transurban share price of $13.84, this will mean forward yields of 2.7% and 4.2%, respectively.

The broker has a buy rating and $16.00 price target on the company's shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Dividend Investing

1 practically perfect Australian stock down 45% to buy now for lifelong income!

Income investors might want to check out this beaten down stock.

Read more »

A man with a wry smile on his face is shown close up behind ascending piles of coins as he places another coin on top of the tallest stack representing rising dividends
Dividend Investing

Here are the 3 biggest dividend payers in my ASX stock portfolio today

These three stocks pour cash in to my portfolio...

Read more »

A senior investor wearing glasses sits at his desk and works on his ASX shares portfolio on his laptop.
Dividend Investing

Overinvested in Fortescue shares? I'd buy these ASX dividend shares

Fortescue may not be the best choice for dividend income.

Read more »

Close up of woman using calculator and laptop for calculating dividends.
Dividend Investing

Forget term deposits! I'd buy these two ASX 200 shares instead

I’d rather buy these stocks for income than hold a term deposit right now.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Dividend Investing

Forget CBA shares and buy these ASX dividend shares

Analysts are bearish on CBA but bullish on these shares.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Own IVV ETF or other iShares ASX ETFs? Next dividends and DRP prices revealed…

BlackRock has announced the next lot of dividends for its iShares ETFs, as well as the DRP prices.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Dividend Investing

How are these passive income investors earning a 7.5% dividend yield on their surging CBA shares?

CBA shares are proving more lucrative for some passive income investors than others.

Read more »

A couple cheers as they sit on their lounge looking at their laptop and reading about the rising Redbubble share price
Dividend Investing

3 excellent ASX dividend shares to buy with $2,500

Brokers think these shares could be in the buy zone for income investors.

Read more »