Fortunately, in this low interest rate environment, there are a good number of ASX shares paying investors handsome dividends.
Here are three ASX dividend shares that I think income investors should buy right now to beat low rates:
Coles Group Ltd (ASX: COL)
The first ASX dividend share to consider buying is this supermarket operator. I think Coles is well-positioned to grow its dividend at a consistently solid rate over the next decade. This is because of its positive growth outlook thanks to food inflation, its refreshed strategy, defensive earnings, and expansion opportunities. Based on the current Coles share price, I estimate that it offers a fully franked ~3.5% FY 2021 dividend.
Rural Funds Group (ASX: RFF)
A second dividend share to buy today is Rural Funds. It is a leading agriculture-focused property company with a collection of quality assets throughout Australia. I’m a big fan of Rural Funds due to its long term tenancies which have been structured to allow the company to consistently increase its distribution at a solid rate each year. For example, the earnings visibility this provides means the company has already provided its distribution guidance for FY 2021. It plans to pay shareholders a 11.28 cents per share distribution. Based on the current Rural Funds share price, this equates to a 5.6% yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
A final option to consider is a dividend-focused exchange traded fund. As its name implies, the Vanguard Australian Shares High Yield ETF has a focus on high yield dividend shares. It provides investors with exposure to 62 of the highest yielding shares on the ASX through just a single investment. This includes the likes of Coles, the big four banks, and high-yielding miners and telcos. At present I estimate that its units offer a FY 2021 dividend yield of at least 4.4%.
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
- Is it too late to buy the outperforming Woolworths share price and Coles share price?
- Coles launches new collectables! Is the Coles share price a buy?
- These shares were the ASX 200’s biggest losers last week
- ASX 200 Weekly Wrap: ASX has week of high volatility
- Beat low interest rates on savings accounts with these ASX dividend shares
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Why I would buy Coles and these ASX dividend shares today appeared first on Motley Fool Australia.
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