Fortunately for income investors in this low interest rate environment, there are plenty of dividend shares that offer superior yields to those that you’ll find with term deposits and savings accounts.
Three strong ASX dividend shares that I would buy today are listed below. Here’s why I like them:
BWP Trust (ASX: BWP)
BWP is a real estate investment trust which has strong ties with Wesfarmers Ltd (ASX: WES). Not only are the majority of BWP’s warehouses leased to the conglomerate’s Bunnings business, Wesfarmers is also a major BWP shareholder. I see this as a big positive as I feel the Bunnings owner is very unlikely to do anything that would have a negative impact on BWP’s performance and ultimately its investment. As a result, I believe the company is well-placed to continue delivering consistent income and distribution growth over the next decade. Based on the latest BWP share price, I estimate that it offers investors a forward 4.7% yield.
Coles Group Ltd (ASX: COL)
Another dividend share that has close ties with Wesfarmers is Coles. It was spun out of the conglomerate back in 2018. Since then it has been onwards and upwards for the supermarket giant’s share price. Despite this, I don’t believe it is too late to invest. I’m confident that it can grow its earnings and dividend at a solid rate over the next decade thanks to its defensive earnings, refreshed strategy, expansion opportunities, and its focus on automation. For now, based on the current Coles share price, I estimate that its shares offer a fully franked 3.4% FY 2021 dividend.
Transurban Group (ASX: TCL)
A final dividend share to consider buying is Transurban. I think it would be a great long term option for patient investors. This is because although its performance is likely to underwhelm in the immediate term, I expect a swift recovery for its toll roads once the pandemic passes. I also expect the same for its distributions and believe a 44 cents per unit distribution is possible next year. Based on the current Transurban share price, this equates to a 3.1% distribution yield.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, and Wesfarmers 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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