Are you looking for safe dividend options during these uncertain times? Then you might want to consider buying the ASX dividend shares listed below.
I feel confident that they will continue to pay dividends largely as normal for the foreseeable future. Here’s why I would buy them:
Vanguard Australian Shares High Yield ETF (ASX: VHY)
The first dividend option for investors to consider buying is this exchange traded fund. As you might have guessed from its name, the Vanguard Australian Shares High Yield ETF has a focus on high yield shares. The fund has invested in 66 of the highest yielding blue chip shares on the Australian share market.
This includes the likes of BHP Group Ltd (ASX: BHP), the big four banks, Coles Group Ltd (ASX: COL), and telco giant Telstra Corporation Ltd (ASX: TLS). While predicting what dividend it will pay next year is tricky, based on the shares within the fund, I would expect an FY 2021 dividend yield somewhere in the region of 4% to 5%. Another positive with this fund is the diversity it offers investors. No industry accounts for more than 40% of the fund and no single company accounts for more than 10%.
Wesfarmers Ltd (ASX: WES)
A final dividend share to consider buying is Wesfarmers. I think the conglomerate is a great option for income investors due to the quality and diversity of its portfolio. Another positive is management’s long track record of making earnings accretive acquisitions. This could come into play in the near future given the sizeable amount of cash sitting on its balance sheet following the sell down of its stake in supermarket giant Coles earlier this year.
All in all, I believe the conglomerate is well-positioned to deliver solid earnings and dividend growth over the next decade. And based on the current Wesfarmers share price, I estimate that it provides investors with an FY 2021 fully franked ~3.2% dividend 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.
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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 and has recommended Telstra Limited. 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.
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