While there are hopes that interest rates may now improve sooner than expected, this is still like to be a couple of years away.
In light of this, the Australian share market looks likely to be the best place to generate a passive income for the time being. But which dividend shares could be top options? Here are two blue chips to consider:
Image source: Getty Images
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
This banking giant certainly has returned to form in FY 2021. Last month ANZ released its half year results and revealed a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020.
Positively, thanks to favourable trading conditions, a booming housing market, and the relaxation of responsible lending rules, ANZ looks well-placed to build on this in the second half and in FY 2022.
Analysts at Morgans are very bullish on the bank. They currently have an add rating and $34.50 price target on its shares.
The broker is also forecasting fully franked dividends of 145 cents per share in FY 2021 and 163 cents per share in FY 2022. Based on the latest ANZ share price of $28.98, this represents yields of 5% and 5.6%, respectively.
Sonic Healthcare Limited (ASX: SHL)
Sonic Healthcare is one of the world's leading healthcare providers, with operations in Australasia, Europe and North America. It currently employs more than 1,500 pathologists and radiologists, and more than 10,000 medical scientists, radiographers, sonographers, technicians, and nurses.
Sonic has been a particularly positive performer in FY 2021 thanks to increased demand for COVID-19 testing. This led to the company reporting a 33% increase in first half revenue to $4.4 billion and a massive 166% increase in first half net profit to $678 million.
A similarly strong second half is expected. And with COVID testing demand expected to remain high into 2022, it looks well-placed to continue its positive form into FY 2022.
Credit Suisse is a fan of the company. Its analysts currently have an overweight rating and $40.00 price target on its shares. The broker is forecasting dividends of 97 cents per share in FY 2021 and 98 cents per share in FY 2022. Based on the latest Sonic share price of $37.81, this will mean yields of 2.55% and 2.6%, respectively.
