2 Top High Yield Dividend ASX Stocks Of 2021
The ASX 200 was trading 0.20% lower to 7,355.60 in early APAC deals on Friday. The index is snapping four consecutive sessions of gain despite a strong session in the U.S. Sectors. Real estate stocks declining while stronger commodity prices boosted miners and energy companies alike.
The ASX ended the day in the red, down 0.45% and down by about 0.60% for this week.
Our List of ASX High Yield Dividend Stocks Of The Week That Needs Close Monitoring.
At the moment of writing, the Australian index still remains 2.6% below its all-time high. The recent correction on the broad market could be an opportunity to consider these two income stocks in your portfolio:
Australia and New Zealand Banking Group Limited (ASX: ANZ)
Sure, the ANZ Group share price has struggled in the past few weeks. The pain for investors continued today, with shares in the banking giant closing -1% lower for this week. Although the short-term outlook might not seem bright for ANZ stocks, though, the banking giant is a sure play if you are looking for a solid income stock. As you know, ANZ is one of the big four and exhibits a solid balance sheet. At the current price of $27.41 per share, ANZ is about 26% below its all-time high from back in March 2015. Looking at this angle, it might be an interesting opportunity to grab some shares while it is still cheap. Most importantly, ANZ’s dividends are back to their positive growth territory. Thus, ANZ paid a fully franked dividend of 70 cents per share in July for the first half of FY21. This is above the 35 cents recorded in the prior period.
We are projecting a total FY21 dividend payment of 140 cents, implying a 70 cent-per-share final dividend payment. This would give ANZ a fully franked current dividend yield of 5.11%. A forecasted payout ratio of roughly 65%.
Besides, ANZ has a strong capital position and cost reductions. The bank announced its intention to buy back up to $1.5 billion worth of shares on the market as part of its capital management plan.
Telstra Corporation Limited (ASX: TLS)
From telegrams to touch-screen tablets, Telstra is Australia’s largest and longest-running provider of telecommunications and information products and services.
Telstra is one of the largest listed companies on the ASX and provides 18.3 million retail mobile services. TLS also serve 3.7 million retail fixed bundles and standalone data services and 1.4 million retail fixed standalone voice services within Australia. Telstra is also present in twenty countries around the globe.
Telstra is another interesting ASX dividend share. This telco could be a top option due to its ever-improving outlook. The company is leading the 5G. It is very efficient in asset monetisation, and cost-cutting. Combined, these are expected to allow the company to return to growth in FY22.
Pleasingly, that isn’t expected to be a one-off. We expect sustainable growth over the medium term through the newly announced T25 strategy. From a metrics perspective, Telstra is looking for the T25 strategy to boost its service quality across departments. Hopefully, this would improve the company’s overall performance.
Brokers and analysts have recognised the potential of the T25 strategy. Hence, analysts are issuing a buy rating and a $4.40 price target on its shares. As a result, we expect the new strategy to support 16 cents per share dividends through to FY23. After which, we could anticipate the first increase in a decade to 18 cents per share onward FY24.
Based on the current Telstra share price of $3.95, this will mean fully franked 4% yields for the next couple of years before the increases.