Unfortunately, because of the pandemic, a number of popular dividend shares have been forced to defer or cancel their dividends.
The good news is that there are still a handful of companies out there that appear well-positioned to pay their dividends as normal.
Two safe ASX dividend shares that I believe will pay generous dividends are listed below. Here’s why they could be good options for income investors right now:
Coles Group Ltd (ASX: COL)
One of the safest dividend shares I think you could buy today is Coles. During the pandemic the supermarket giant has experienced a surge in sales from panic buying and more eating at home. And while increased operating costs will mean that not all of this sales growth flows to the bottom line, I’m confident Coles will deliver a solid increase in full year earnings and ultimately its dividend. I expect this positive form to continue in FY 2021 and for Coles to be in a position to pay another generous dividend. Based on this and the current Coles share price, I estimate that it offers investors a fully franked FY 2021 dividend yield of ~3.5%.
Wesfarmers Ltd (ASX: WES)
Another safe dividend share to consider buying for income is Coles’ former parent, Wesfarmers. I think the conglomerate is a great option due to the quality and positive outlook of its diverse portfolio of businesses. Another positive is that Wesfarmers has a sizeable cash balance, especially after the selldown of its Coles stake earlier this year. I believe these funds are likely to be used for acquisitions in the near future. And given management’s track record of successful investments, these could give its earnings and dividend growth a real boost in the coming years. For now, though, based on the current Wesfarmers share price, I estimate that it offers a fully franked forward 3.3% dividend yield.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
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
More reading
- Better buy today: Coles or Woolworths shares?
- Downer share price lower despite contract wins
- CBA and 2 more ASX shares to buy and hold forever
- What would deflation mean for your ASX shares?
- Can the Marley Spoon share price climb even higher?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET 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.
The post Buy Coles and this safe ASX dividend share for income in August appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3hGqLFO
Leave a Reply