Overnight the U.S. Federal Reserve held its monetary policy meeting for June. The central bank kept interest rates on hold at zero and revealed plans for rates to remain at these levels for the next couple of years.

I expect this to be the case in Australia as well and feel it will be many years until interest rates return to “normal” levels again.

In light of this, I continue to believe that ASX dividend shares will be the best way to earn a passive income for the foreseeable future.

But which dividend shares should you buy? Here are three top ASX dividend shares I would buy:

Coles Group Ltd (ASX: COL)

I think that this supermarket operator would be a great dividend share to own. This is due to its defensive qualities and positive long term outlook. I believe this has positioned Coles to deliver solid earnings and dividend growth over the next decade whatever the economy throws at it. At present, I estimate that its shares offer a forward fully franked 3.7% dividend yield.

Dicker Data Ltd (ASX: DDR)

Dicker Data is a wholesale distributor of computer hardware and software. It has consistently grown its earnings and dividends at a solid rate for many years thanks to an increasing number of vendor agreements and solid demand. In FY 2020 the company intends to increase its dividend by 31% to 35.5 cents per share. This represents a 4.5% fully franked dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final dividend share to consider buying is Telstra. After several tough years, I believe the telco giant’s outlook is the best it has been in a long time. This is because the NBN headwind will soon start to ease and a return to growth should then be possible. Especially given the positive progress it is making with its T22 strategy. In the meantime, I’m confident that its free cash flow can sustain its 16 cents per share fully franked dividend. This represents a very attractive 4.9% dividend yield.

More reading

• The TPG share price is on the up. A good long-term buy today?
• 2 quality ASX dividend shares to buy today
• Why the CSL share price continues to trail the ASX 200
• Not keen on Westpac? Then buy these top ASX dividend shares instead
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points

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. 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 3 top ASX dividend shares to buy to beat low interest rates appeared first on Motley Fool Australia.

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Is the National Australia Bank Ltd (ASX: NAB) share price a buy right now?

The major ASX bank has seen its share price go up 31.4% since 22 May 2020. That’s an astonishing return in a short amount of time for such a big business.

Investors are getting more confident that the Australian economy won’t be harmed by the coronavirus as much as first feared. The overestimation of the cost of jobkeeper is a great example of things looking better than previously expected.

There is still a lot of economic pain out there. NAB included an $807 million provision for potential COVID-19 impacts in its FY20 half-year result. There’s a reason why investors sent the NAB share price lower. Only time will tell whether that provision was too much or too little.

NAB has been showing a rising level of loan arrears in recent reports. The 90+ day past due arrears of total loans was 0.71% at the end of FY18, 0.79% in the first half of FY19, 0.93% at the end of FY19 and 0.97% in the recent FY20 half-year result. That’s not a good trend.

Could the NAB share price still be an opportunity?

Several weeks ago I thought the NAB share price was cheap if the economy recovered quicker than expected.

However, the strength of the NAB share price changes the value.

Low interest rates seem like they’re here to stay. This could cause the NAB net interest margin (NIM) to come under even more pressure. The NAB share price will follow earnings over time.

I like that NAB is investing in lifting skill levels, according to the Australian Financial Review. I also like the new NAB leadership team.

Who knows what’s going to happen with the NAB dividend this year? At the moment it has an annualised grossed-up dividend yield of 4.25%. However, if the economy is better than expected then perhaps the final dividend will be larger. I wouldn’t count on big dividends this year though.

Ultimately, I don’t see much compelling value at the current NAB share price. There are still risks to be wary of.

More reading

• Are Aussies still withdrawing cash like crazy?
• The ASX bank dividend recovery may be better than what the market thinks
• The ANZ share price has soared 37% in 2 weeks. Here’s why.
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• ‘Westpac share price undervalued’, says analyst

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Is the NAB share price a buy right now? appeared first on Motley Fool Australia.

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