Fortunately, in this low interest rate environment, there are plenty of shares offering investors attractive dividend yields.
Two dividend shares that are currently rated as buys are listed below. Here's what you need to know about them:
Carsales.Com Ltd (ASX: CAR)
The first dividend share to look at is Carsales. It is the dominant auto listings company in the ANZ market and operates a number of similar websites across the world.
The latter will soon include a stake in the US-based Trader Interactive. Carsales recently agreed to pay US$624 million (A$800 million) for a 49% interest in the leading digital marketing solutions and services provider to the commercial truck, recreational vehicle, powersports, and equipment industries. It also has a call option to acquire the remaining interest on specified terms in the future.
One broker that believes the company is well-placed for growth in the coming years is Morgan Stanley. Its analysts currently have an outperform rating and $23.00 price target on its shares.
The broker is forecasting dividends of 62 cents per share in FY 2021 and 71.6 cents per share in FY 2022. Based on the latest Carsales share price of $19.53, this represents fully franked dividend yields of 3.2% and 3.65%, respectively.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Sydney Airport is another dividend share that could be worth looking at. This airport operator has been hit particularly hard during the pandemic. With passenger numbers falling materially, Sydney Airport's income also fell materially.
The good news is that with domestic tourism continuing to improve and international travel expected at the end of the year, things are starting to look a lot more positive.
It is for this reason that analysts at Goldman Sachs are predicting a big dividend increase in 2022 from Sydney Airport. It is forecasting an 8.8 cents per share dividend in FY 2021 and then 27.1 cents per share in FY 2022.
Based on the current Sydney Airport share price of $5.92, this will mean yields of 1.5% and 4.6%, respectively. Goldman Sachs has a buy rating and $6.73 price target on the company's shares.
