It certainly has been a difficult year for income investors. The cash rate is at a record low of 0.25% and many of the most popular dividend shares have either deferred or cancelled their dividends.

The good news is that despite this, it is still possible to earn a decent income this year on the share market.

This is thanks to a number of dividend-paying companies that are well-placed to continue their growth in 2020 despite the pandemic.

Two safe dividend shares I would buy today for income are listed below:

Dicker Data Ltd (ASX: DDR)

The first dividend share to consider buying right now is Dicker Data. I’ve been very impressed with the way the company has continued to perform strongly this year despite the pandemic. Last month it revealed that its first quarter profits grew 36.3% on the prior corresponding period to $18.4 million. This was driven partly by increasing demand for working at home software and hardware. The company also revealed plans to increase its fully franked dividend by 31% to 35.5 cents per share in FY 2020. This represents a 5% fully franked dividend yield which will be paid in quarterly instalments.

Rural Funds Group (ASX: RFF)

Another good option for income investors could be this agriculture-focused property group. Rural Funds owns a large number of assets across several agricultural industries. These assets are of a high quality and are tenanted on long term agreements by many of the largest food producers in Australia. In light of this, I believe Rural Funds is well-positioned to continue growing its distribution at a consistently solid rate for a long time to come. In FY 2021 the company intends to lift its distribution to 11.28 cents per share. This works out to be a forward 5.9% distribution yield.

More reading

• Do you have $3,000 to invest in these 3 top ASX dividend shares?
• Why Dicker Data, Medibank, Mesoblast, & Orora are dropping lower
• This ASX dividend share is the latest to raise capital amid COVID-19
• Westpac tips the cash rate to stay at 0.25% until the end of 2023
• Why this stock is retiree’s dream ASX share for income

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 RURALFUNDS STAPLED. 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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The Afterpay Ltd (ASX: APT) share price was a very impressive performer once again last week.

During the period the payments company’s shares smashed the S&P/ASX 200 Index (ASX: XJO) with a stunning 37% gain.

This gain means that Afterpay’s shares have now climbed 400% since crashing to a 52-week low of $8.01 in March.

Why did the Afterpay share price rocket higher?

The catalyst for Afterpay’s gain last week was news that Tencent Holdings has become a substantial shareholder.

This is potentially a bigger deal than first meets the eye. Tencent Holdings is the US$500 billion owner of the WeChat app which dominates the China market.

WeChat is a multi-purpose messaging, social media and mobile payment app which has over 1.1 billion monthly users.

The payment side of the business has been growing particularly strongly for Tencent. In the fourth quarter of 2019 it exceeded 1 billion daily average transactions for its commercial payments, covered over 800 million monthly active users, and worked with over 50 million monthly active merchants.

Clearly, a partnership of some kind in the future between the two parties could have a material benefit for Afterpay.

Afterpay certainly recognises this. Commenting on the substantial shareholder news, it said: “Tencent’s investment provides us with the opportunity to learn from one of the world’s most successful digital platform businesses. To be able to tap into Tencent’s vast experience and network is valuable, as is the potential to collaborate in areas such as technology, geographic expansion and future payment options on the Afterpay platform.”

This was echoed by Tencent’s chief strategy officer, James Mitchell.

He said: “Afterpay’s approach stands out to us not just for its attractive business model characteristics, but also because its service aligns so well with consumer trends we see developing globally in terms of Afterpay’s customer centric, interest free approach as well as its integrated retail presence and ability to add significant value for its merchant base”. 

Is it too late to invest?

While Afterpay clearly isn’t the bargain buy that it was just a little over six weeks ago, I still see a lot of value in its shares for long term focused investors.

There’s no guarantee that Tencent’s shareholding will lead to an expansion into Asia in the future, but if it does, combined with its existing operations and probable expansion into continental Europe, Afterpay looks well positioned to grow into a global payments giant over the next decade.

More reading

• These are the star ASX shares of the week
• These were the best performing ASX 200 shares last week
• Who is Tencent, Afterpay’s new investor?
• Why ASX payments shares might be the biggest winners of the 2020s
• Afterpay competitor Zip Co rockets higher after reporting 86% increase in April volumes

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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This week I became even more confident about Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). I think the Soul Patts share price looks even better because it’s expanding into a new industry.

According to reporting by the Australian Financial Review, Soul Patts is going to expand into data centres. It could be a very good move considering the current coronavirus conditions may make more people work from home permanently.

Soul Patts is not doing it alone, it’s taking a “significant” stake and help Leading Edge Data Centres grow.

The idea is to build smaller data centres in regional locations like Newcastle, Albury and Coffs Harbour. There’s a lot of data centre competition in the capital cities, but the regional areas also need the services and advantages provided by data centres.

It could even turn into a positive self-fulfilling loop. If the regional areas have the technology to support high-tech work then more people could move there and away from the congestion and high cost of living in those capital cities.

According to the AFR, Soul Patts believes that Leading Edge has the right relationships, sites and configuration to make a profitable go at the venture.

Why does this make me more confident about the Soul Patts share price?

The Soul Patts share price has been a good performer over the decades. The investment house’s current largest holdings are businesses like TPG Telecom Ltd (ASX: TPM), New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API). These businesses may generate good dividends for Soul Patts but there’s not going to be a lot of growth.

Those investments started off as small holdings and grew. Brickworks Limited (ASX: BKW) has a bit more growth potential but it’s going to be these new, smaller investments that drive future growth for Soul Patts.

I’m not just investing at today’s Soul Patts share price with only today’s investments in mind, but I’m thinking about the way the company will pivot towards growth and new industries in the coming years. That ability to regenerate the portfolio means Soul Patts can keep making good returns over the very long-term.

Foolish takeaway

At this share price Soul Patts offers a grossed-up dividend yield of 4.8%. I think we can be well rewarded for holding the company for the long-term with a very reliable growing dividend. I’d be very happy to buy some shares at this price.

More reading

• How to make a $1 million share portfolio by investing $1,000 a month
• 2 ASX shares I’ll hold until I’m 100
• 3 ASX dividend shares I would buy instead of the ASX banks today
• Why high dividend paying ASX shares are still the best way to secure a regular investment income
• 2 ASX shares to hold forever

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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