2 blue chip ASX dividend shares to buy

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With interest rates likely to remain low for some time to come, the yields on the ASX dividend shares listed below could be even more attractive than normal for income investors.

Here's what you need to know about these blue chip dividend shares that are rated as buys:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to consider is this supermarket, convenience store, and liquor retailing giant.

As was widely expected, Coles recently released a strong full year result for FY 2021. For the 12 months ended 30 June, it reported a 3.1% increase in revenue to $38,562 million and a 7.5% lift in net profit after tax to $1,005 million.

This strong form allowed Coles to increase its full year dividend by 6% to a fully franked 61 cents per share.

The team at Macquarie were pleased with its performance. In response, the broker put an outperform rating and $19.80 price target on its shares.

Macquarie is also forecasting modest dividend growth in the near term. It has pencilled in dividends of 62.2 cents per share in FY 2022 and 64.8 cents per share in FY 2023. Which, based on the current Coles share price of $17.86, implies fully franked yields of 3.5% and 3.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to look at is this banking giant. Like Coles, it has been a strong performer in FY 2021, reporting stellar profit growth during the first half of the year. This leaves it well-placed to deliver a solid full year result in the coming months.

But that's not all NAB has done this year. It has also announced the proposed acquisition of Citi's Australian consumer operations for $1.2 billion. This is expected to boost its position in areas of banking that it was lacking.

Despite this purchase, the company's balance sheet remains very strong and well-ahead of APRA's unquestionably strong benchmark. This excess capital could mean share buybacks are undertaken later this year like its peers.

Analysts at Goldman Sachs are very positive on the bank. This is due to NAB's cost management initiatives, strong position in business banking, and its excellent management of volumes and margins.

Goldman has a conviction buy rating and $30.62 price target on the bank's shares. This compares to the latest NAB share price of $27.41. The broker is also forecasting generous yields of 4.3%, 4.8%, and 5.1%, respectively, between FY 2021 and FY 2023.

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

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