The BHP Group Ltd (ASX: BHP) share price is down 8.79% year to date but continues to climb higher since its March lows.

BHP shares fell as low as $24.05 on 13 March in the midst of the bear market. However, the company’s share price is back up to $35.50 and is now outperforming the S&P/ASX 200 Index (ASX: XJO) in 2020.

So, is this just a flash in the pan or is the BHP share price back in the buy zone this year?

Why the BHP share price could be a buy

BHP is a diversified miner with strong operations across iron ore, copper, aluminium and diamonds. This means there are a lot of potential earnings streams to help weather the current downturn.

I think we’ll continue to see strong demand for iron ore in 2020. The coronavirus pandemic has sparked what looks to be a global recession with governments across the globe trying to stabilise their economies.

One of the easiest ways to do this is through infrastructure spending. I think we could see governments like China and Australia turn to infrastructure to boost employment and economic output.

That’s good news for the BHP share price and the company’s shareholders. Iron ore is a basic material used for steel production and any infrastructure projects could help support global demand.

What are the downside risks?

Despite some strong tailwinds, there are risks to buying the BHP share price at $35.50.

Geopolitical tensions remain high in 2020. That means we could see further trade wars either between the USA and China or China and Australia.

That’s bad news for major exporters like BHP. The other risk factor is just the uncertainty. No one really knows what the future holds in the coming months, let alone years.

Given the current economic climate, I think it’s quite likely we will continue to see sharp BHP share price movements for at least the next few months. If you’ve got what it takes to ride out this short-term volatility, BHP could still represent solid, long-term buying at current prices.

More reading

• Where will the Coles share price be in 1 year?
• Tax planning for ASX 200 investors
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX shares that are absurdly cheap right now
• Why ASX 200 travel shares are soaring higher today

Motley Fool contributor Ken Hall 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.

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Next week the Reserve Bank of Australia will be deciding on the cash rate once again.

According to the latest cash rate futures, at present the market is pricing in a 47% probability of a rate cut at this meeting.

While I’m not convinced rates will go lower from here, I am convinced that they will stay at ultra-low levels for a number of years to come.

In light of this, I continue to see the share market as the best place for investors to turn to for income.

But which shares should you buy? These three top ASX dividends shares are high on my list:

Commonwealth Bank of Australia (ASX: CBA)

If you don’t already have exposure to the big four banks, then I think it would be worth considering Commonwealth Bank. While trading conditions are tough for the banks, I’m optimistic that the worst is largely behind them now. This could make it an opportune time to make a patient investment in Commonwealth Bank’s shares. I expect the bank to cut its dividend to ~$3.70 per share in FY 2021, which implies a forward fully franked 6% yield.

Rio Tinto Limited (ASX: RIO)

I think Rio Tinto could be worth considering. Especially with iron ore prices trading at lofty levels and some tipping prices to go even higher. This should lead to Rio Tinto delivering strong profits for at least the next couple of years. And given the strength of its balance sheet, I expect the majority of its free cash flow to be returned to investors. Last week Morgans suggested that Rio Tinto’s shares offer a fully franked ~9% FY 2021 dividend yield.

Wesfarmers Ltd (ASX: WES)

A final dividend share to consider buying is Wesfarmers. It is the conglomerates behind brands such as Bunnings, Kmart, Target, online retailer Catch, and Officeworks. It also owns a number of businesses in the chemicals and industrials industries. And while its shares may not offer the biggest yield, I believe its businesses leave it well-placed to grow its dividend at a solid rate over the next decade. At present I estimate that its shares offer a forward fully franked ~3.7% dividend yield.

More reading

• ASX 200 rallies hard, no longer in bear territory
• Latest spending data could drive the ASX retail sector higher
• Why ANZ, CBA, NAB, and Westpac shares are storming higher today
• 3 top ASX dividend shares to buy in June
• Leading brokers name 3 ASX 200 shares to sell today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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 3 top ASX dividend shares I would buy for income right now appeared first on Motley Fool Australia.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) continued its sensational form and stormed a further 2.9% higher to 5,780 points.

Will the market be able build on this on Wednesday? Here are five things to watch:

ASX 200 expected to tumble.

The ASX 200 index looks set to give back some of yesterday’s gains on Wednesday. According to the latest SPI futures, the index is expected to open the day 63 points or 1.1% lower this morning. This follows a positive but not spectacular start to the week on Wall Street overnight following Monday’s public holiday. The Dow Jones rose 2.2%, the S&P 500 climbed 1.2%, and the Nasdaq edged 0.2% higher.

Oil prices climb higher.

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices jumped higher. According to Bloomberg, the WTI crude oil price has pushed 3% higher to US$34.24 a barrel and the Brent crude oil price is up 1.9% to US$36.20 a barrel. Traders appear optimistic that major producers are following through on their supply cut promises.

Gold price sinks lower.

It could be a difficult day for gold miners including Evolution Mining Ltd (ASX: EVN) and St Barbara Ltd (ASX: SBM) after the gold price sank lower overnight. According to CNBC, the spot gold price fell 1.9% to US$1,703.00 an ounce. This was driven by investors switching out of safe haven assets and back into risk assets.

ALS full year update.

The ALS Ltd (ASX: ALQ) share price will be on watch today when the testing services company releases its full year update. Last week analysts at Credit Suisse upgraded its shares to an outperform rating with an $8.00 price target. They appear confident that ALS will deliver a decent result this morning.

Coca-Cola Amatil upgraded.

The Coca-Cola Amatil Ltd (ASX: CCL) share price will be on watch today after analysts at Goldman Sachs upgraded the beverage company’s shares to a neutral rating with a price target of $9.50. This follows the release of a trading update at its annual general meeting on Tuesday. The broker made the move on valuation grounds after a sharp pullback in its share price over the last 12 months.

More reading

• 2 ASX shares that are absurdly cheap right now
• Why ASX 200 travel shares are soaring higher today
• ASX 200 rallies hard, no longer in bear territory
• Latest spending data could drive the ASX retail sector higher
• The latest ASX shares that brokers have just upgraded to “buy”

Motley Fool contributor James Mickleboro 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 5 things to watch on the ASX 200 on Wednesday appeared first on Motley Fool Australia.

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