With interest rates at ultra-low levels and unlikely to improve for some time to come, I continue to believe that the share market is the best place to earn a passive income.
But which dividend shares should you buy? Listed below are two top ASX dividend shares which I think are high quality options right now. Here’s why I like them:
Dicker Data Ltd (ASX: DDR)
Dicker Data is a wholesale distributor of computer hardware and software. It has been an exceptionally strong performer in 2020 despite the pandemic. In fact, this week Dicker Data released a half year update which revealed unaudited first half revenue of $1 billion and net profit before tax of $40 million. This represents an 18.3% and 25% increase, respectively, over the prior corresponding period.
In light of this, I’m confident it is in a position to deliver on its plan to increase its dividend by 31% this year. This will bring it to 35.5 cents per share, which based on the current Dicker Data share price, equates to a fully franked 4.6% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Another dividend share that I think income investors ought to buy is Telstra. After several years of struggles because of the decline of its fixed line business due to the NBN rollout, I believe a return to growth is finally on the horizon. This is thanks to its sizeable cost cutting, the arrival of 5G internet, and of course the easing of the NBN headwinds.
In respect to the latter, peak pain from the NBN rollout is expected to hit in the near future. After which, the pressure on its earnings will ease and growth could be on the agenda once again. Positively, until then I’m confident that its free cash flows are more than enough to sustain its 16 cents per share dividend. Based on the current Telstra share price, this equates to an attractive fully franked 5% 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
- Why Afterpay, Bigtincan, Dicker Data, & NIB shares are racing higher
- Dicker Data share price surges higher after revealing strong first half profit growth
- Fund managers have been snapping up Sonic and these ASX 200 stocks
- These 2 ASX tech shares show stellar growth prospects
- Top ASX Stock Picks for July 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and 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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