A major component of choosing an ASX dividend share is, naturally, the yield that that ASX dividend share has on offer. As long as a company can pay a reasonable and stable dividend each year, the onus on delivering capital growth can be eased. This is especially true for investors who only invest for dividend income.
So here are 2 ASX dividend shares that are offering attractive yields on recent pricing, as well as full franking credits.
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2 ASX dividend shares with attractive yields this week
Coles Group Ltd (ASX: COL)
Coles is one of the most well-known companies in the country. It's Australia's second-largest grocery chain and also owns some other ventures, such as bottle shop chains.
Coles shares have been out of favour ever since the company reported its earnings for the first half of FY2021 last month. And that was despite the company reporting an 8% increase in revenue and a 10% jump for its interim dividend.
In fact, Coles shares are now down around 15% year to date. But, as ASX dividend investor would know, lower share prices mean higher starting dividend yields. And the most recent pricing of Coles indicated a dividend yield of 3.88% (or 5.54% grossed-up with full franking) on offer.
That's a heck of a lot more than what you could expect from a term deposit these days and handily outstrips inflation as well. Since Coles sells groceries and other life essentials, its earnings base is relatively durable as well (as the company proved last year). That is a great advantage to have in a dividend share and is one of the reasons Coles was able to grow its dividends during the worst of the coronavirus pandemic in 2020.
Telstra Corporation Ltd (ASX: TLS)
Telstra is another ASX dividend share to consider today. As the ASX's largest telco, Telstra has long had a reputation for large dividend yields, despite the infamous 'day of the long dividend knives' in 2017 (when Telstra slashed its dividends from the historic high of 31 cents a share).
These days, Telstra pays an annual dividend of 16 cents per share (including 6 cents in special dividends), which the company recently re-affirmed for 2021. Even so, this annual payout equates to a yield of roughly 5.2% on recent pricing, or 7.41% grossed-up with full franking.
As with Coles, that kind of yield runs rings around term deposits despite interest rates and other cash-based investments. It also puts Telstra in the upper echelons of yields offered by many of the ASX's blue-chip shares, like the big four banks.
Since Telstra sells highly inelastic products and services like phones, broadband and mobile data (all modern essentials), it also has a very inelastic earnings base as well.
