2 ASX shares tipped to pay bumper dividends in 2021

These ASX shares could be rewarding shareholders handsomely in 2021…

| More on:
Dividend stocks represented by paper sign saying dividends next to roll of cash

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

With savings accounts and term deposits still offering very low interest rates, the share market arguably remains the best place to earn a passive income.

But which ASX dividend shares should you consider buying? Two to look closely at are listed below:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The Charter Hall Social Infrastructure REIT is a real estate investment trust focused on social infrastructure properties. These include specialist use properties with low substitution risk such as childcare centres and government sites.

At the end of the first half of FY 2021, the company had an occupancy rate of 99.7% and a weighted average lease expiry (WALE) of 14 years. This helped drive solid earnings growth during the half, allow the Charter Hall Social Infrastructure REIT board to increase its fully year distribution guidance to 15.7 cents per share for FY 2021.

Based on the current Charter Hall Social Infrastructure REIT share price, this will mean a yield of 4.5% for investors.

Goldman Sachs currently has a buy rating and $3.45 price target on its shares.

Fortescue Metals Group Limited (ASX: FMG)

Another dividend share to look at is Fortescue. It is one of the world's largest producers of iron ore, with a number of operations across the Pilbara region in Western Australia.

Fortescue has been tipped to reward shareholders with very generous dividends in the near term thanks to the sky high iron ore price, which has just surpassed US$210 a tonne. This compares favourably to its C1 costs guidance of US$13.50 to US$14.00 per wet metric tonne. And while its lower grade product won't command the full iron ore price, it will still be generating significant profits on each tonne.

Ord Minnett is very positive on the company and is forecasting fully franked dividends of $3.36 per share in FY 2021 and $2.93 per share in FY 2022. With the Fortescue share price currently fetching $22.65, this will mean massive dividend yields of 14.8% and 12.8%, respectively.

Its analysts have a buy rating and $28.00 price target on the company's shares.

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Woman in celebratory fist move looking at phone
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Share Market News

Record CBA share price and blockbuster merger push ASX 200 financials sector to the top

ASX financial stocks led the 11 market sectors last week with a 1.95% gain.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Market News

CBA Shares in focus: How Australia's most valuable company is using AI to compete

Could AI initiatives drive CBA shares higher?

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Looking for big returns? Brokers think these shares could do the job.

Read more »

asx share price represented by cartoon letters spelling the word FOMO
Share Market News

What did Macquarie's "FOMO Meter" reveal about the stock market in May?

Is the market getting frothy or is there still room to climb?

Read more »

Market up or down
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough end to the week...

Read more »

Man in an office celebrates at he crosses a finish line before his colleagues.
Share Gainers

4 ASX 200 shares racing ahead of the benchmark this week

ASX investors sent these four stocks soaring 12% to 18% this week. But why?

Read more »

A young man sits at his desk working on his laptop with a big smile on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »