If you're wanting to overcome low interest rates, then you may want to look at the dividend shares listed below.
Both shares are expected to provide investors with generous yields that are vastly superior to those offered with term deposits and savings accounts. Here's what you need to know about these dividend shares:
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Aurizon Holdings Ltd (ASX: AZJ)
The first ASX dividend share to look at is Aurizon. It is Australia's largest rail freight operator, transporting more than 250 million tonnes of Australian commodities each year.
Last week it released its full year results and revealed a 1% decline in revenue to $3.019 billion and a flat net profit after tax of $531 million. This was in line with the expectations of leading broker Credit Suisse.
Its analysts remain positive on the company and have an outperform rating and $5.30 price target on its shares. This is notably higher than the current Aurizon share price of $4.00.
The broker is also expecting generous dividends in the near term. It is forecasting dividends per share of 29.5 cents in FY 2022 and then 30.9 cents in FY 2023. This represents yields of 7.4% and 7.7%, respectively.
South32 Ltd (ASX: S32)
If you're not averse to investing in the resources sector, then another ASX dividend share to consider is South32.
This mining giant has exposure to a diverse group of commodities. These include alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc.
Goldman Sachs is very positive on the company due to its exposure to aluminium. It believes the metal is in the early stages of a multi-year bull market and expects South32 to benefit greatly.
As a result, the broker has South32 shares on its conviction buy rating with a $3.70 price target. This compares to the latest South32 share price of $3.01
As for dividends, Goldman is forecasting dividends per share of 6.9 US cents in FY 2021 and then 22.1 US cents in FY 2022. Based on the latest South32 share price and current exchange rates, this will mean yields of 3.1% and 10%, respectively, over the next two years.
