If you’re looking for some quality ASX dividend shares to buy, then the three listed below tick a lot of boxes for me.
I think they are among the best on offer for income investors right now. Here’s why:
Commonwealth Bank of Australia (ASX: CBA)
The first ASX dividend share to consider buying is Commonwealth Bank. I think the big four banks were severely oversold during the pandemic and, although they have recovered strongly over the last few weeks, I still think they are undervalued. My preference in the sector remains Commonwealth Bank due to the overall quality of its business. Next year I expect the company to cut its dividend to ~$3.70 per share. If this proves accurate it will mean a fully franked 5.4% FY 2021 yield.
Fortescue Metals Group Limited (ASX: FMG)
Fortescue Metals could be a great dividend share to own if you don’t mind investing in the resources sector. It looks well-positioned to deliver strong profit results in FY 2020 and FY 2021 thanks to sky high iron ore prices, improving production grades, and its low cost operations. And with the iron ore producer’s balance sheet looking strong, I suspect the majority of its free cash flow will be returned to shareholders. I expect this to lead to a fully franked dividend of at least 6% in FY 2021.
Telstra Corporation Ltd (ASX: TLS)
A third dividend share to consider buying is Telstra. The telco giant is one of my favourite income options right now due to its attractive valuation, generous yield, and positive outlook. The latter is thanks to the NBN headwind beginning to ease and its significant cost cutting. Combined, I believe Telstra could return to growth in the coming years. But thankfully, until then I believe it dividend is sustainable at 16 cents per share. This equates to a fully franked 5% dividend yield.
And below 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)
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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.
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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 closes higher, banks keep rising
- Here’s why I think CBA shares are a good buy today
- Ready to invest your first $2,000 in ASX shares? Do these 3 things first
- 2 ASX growth shares I’d buy before Afterpay shares
- Top broker tips the Vocus share price to zoom higher
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.
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