On Thursday Reserve Bank Governor Philip Lowe confirmed that he expects rates to remain at ultra low levels for years.
While this is good news for borrowers, it is a blow for income investors that rely on the interest generated by term deposits and savings accounts.
But don’t worry, because the Australian share market is home to a large number of quality ASX dividend shares offering generous yields.
Two that I would buy are listed below:
BHP Group Ltd (ASX: BHP)
I think the Big Australian would be a good ASX dividend share for income investors that are looking for a little exposure to the resources sector. Although there are a lot of options in the sector, I think BHP is the top pick right now. This is due to its world class operations, low costs, and strong cash flow generation.
Another positive is the high iron ore prices that the company is currently commanding. I believe this has put BHP in a position to reward its shareholders with sizeable dividends again in 2020 and 2021. At present, I estimate that its shares offer a forward fully franked 5.5% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
The big four banks have been flying high this week after investors returned to them en masse. This appears to have been driven by optimism that the economic damage caused by the pandemic won’t be as great as previously expected. Which could even mean a reversal on some of the provisions they have made in recent weeks.
Nevertheless, I still expect the Commonwealth Bank to make a reasonably sharp dividend cut in FY 2021 to ~$3.70 per share. However, even after this cut and strong share price gain this week, its shares will still provide a very generous fully franked forward 5.6% dividend yield.
And here is another dividend share which looks well-positioned to grow strongly over the next decade. This could make it a must buy for income investors..
NEW: Expert names top dividend stock for 2020 (free report)
When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*
Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.
This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.
The name of this dividend dynamo and the full investment case is revealed in this brand new free report.
But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.
More reading
- ASX 200 rises again, ASX banks push higher
- Are ASX bank shares finally back in the buy zone?
- ASX 200 up 2.4%: Blackmores raises $92m, big four banks jump, Nearmap rockets
- ASX 200 edges down, bank share prices fly
- Is now the right time to be buying ASX bank stocks?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post 2 high yield ASX dividend shares to buy right now appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/2yLKjrM
Leave a Reply