The Commonwealth Bank of Australia (ASX: CBA) share price has been a positive performer on the S&P/ASX 200 Index (ASX: XJO) on Tuesday.

In afternoon trade the banking giant’s shares are up 2% to $60.00.

Despite this decent gain, the Commonwealth Bank share price is still down a sizeable 34% from its 52-week high.

Are CBA shares in the buy zone?

I think Commonwealth Bank’s shares are in the buy zone at this level. Though, given how poor investment sentiment is in the sector, I wouldn’t necessarily be surprised if they went lower before going higher.

However, for patient investors that are not bothered by the day to day fluctuations of share prices, I believe an investment at the current level will yield strong total returns over the next three to four years.

Times certainly are tough for the bank right now, but the cycle will soon change and growth will emerge once more. I’d want to be holding its shares when that happens.

What about dividends?

I feel it is inevitable that Commonwealth Bank will have to cut its dividend again in FY 2021.

Estimating just how much of a cut is very difficult and will depend a lot on how accurate its COVID-19 provisions are. However, I would expect the bank to pay out a dividend of around $3.70 per share next year.

While this dividend would be just a touch higher than the one it paid all the way back in 2013, the pullback in its share price means it still equates to a very generous yield.

Based on its current share price, this implies a forward fully franked 6.15% dividend yield. That certainly is attractive in my eyes in this low interest rate environment.

Foolish Takeaway.

The Commonwealth Bank share price could easily go lower before it goes higher again. However, trading conditions will eventually improve and its share price will almost certainly start moving upwards when the market first anticipates this change.

In light of this, I think it could be a good idea to pick up shares with a long term and patient view today.

More reading

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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.

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Looking for strong dividends in 2020?

Well, they’re not as easy to find as it might have appeared in January or February. Since the outbreak of the coronavirus and subsequent economic lockdowns, a huge range of ASX blue-chips announced dividend cuts or even cancellations.

These include everything from the ‘big four’ banks like Westpac Banking Corp (ASX: WBC) to ‘safe’ dividend payers like Transurban Group (ASX: TCL).

But I think there are still some companies out there that offer a solid dividend outlook for 2020 and beyond (although anything is possible). So here are three ASX shares that (in my opinion) won’t have to cut their shareholder payouts this year.

Coles Group Ltd (ASX: COL)

Coles was the face of defensive ASX companies as the coronavirus pandemic took hold. Consumers flocked to Coles and other supermarkets to stock up on essentials, which initially saw Coles post a 12% rise in sales for the first quarter of FY20 last month. Although I suspect demand has returned to more normal levels since, it certainly proved how useful being a consumer staples giant can be in tough times.

As such, I think Coles’ dividends will continue to flow in 2020 (and might even get an increase). On current prices, you can expect a trailing dividend yield of 2.75% from Coles shares – or 3.93% grossed-up with full franking.

Fortescue Metals Group Ltd (ASX: FMG)

Fortescue is one of the largest iron ore mines in the country and has amassed a reputation as a strong dividend payer in recent years. Even on current prices (which are at record highs today), Fortescue has a trailing dividend yield of 7.23% – or 10.76% grossed-up with full franking.

Right now, iron ore is a great business to be in. The iron ore price hit US$91.90 today and looks to push even higher after production issues emerged in Brazil. If these prices hold (or even if they don’t), Fortescue should be able to shovel even more cash out the doors in 2020.

WAM Research Ltd (ASX: WAX)

WAM Research is a Listed Investment Company (LIC) that specialises in finding undervalued growth companies. It has a long and strong history of paying fully franked dividends, which, at the time of writing, give WAX shares a trailing yield of 7.33% (or 10.47% grossed-up).

But the best part of this story is that this LIC has plenty of gas left in the tank to continue to pay these dividends. Its most recent interim dividend came out at 4.9 cents per share – well covered by the company’s profit reserves of 26.2 cents per share. That’s a big buffer for dividend payments to carry us through 2020!

More reading

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Motley Fool contributor Sebastian Bowen owns shares of WAM Research 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.

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If you’re wanting to add a few blue chip ASX shares to your portfolio, then you’re in luck.

The S&P/ASX 200 Index (ASX: XJO) is home to a good number of blue chips which I believe could generate strong returns for investors in 2020 and beyond.

Three blue chip ASX shares that I would buy are listed below. Here’s why I like them:

CSL Limited (ASX: CSL)

The first blue chip I would buy is CSL. I think the global biotherapeutics company has the potential to provide investors with strong returns over the next decade. This is due to its leading therapies, growing plasma collection network, and lucrative research and development pipeline. In respect to the latter, the company has a wide range of therapies under development which have the potential to generate significant revenue and support the rest of the business in the coming years.

REA Group Limited (ASX: REA)

Another blue chip share to consider is REA Group. I think the realestate.com.au operator is one of the best long term investments on the ASX 200. This is because of its high quality and resilient business model. This resilience has been on display this year. REA Group recently released its third quarter update and revealed a 1% increase in revenue to $199.8 million and an 8% lift in EBITDA to $119.6 million. This was despite dealing with a 7% decline in listings during the quarter. And while trading conditions will remain tough in the near term, I expect its earnings growth to accelerate once the crisis passes.

Woolworths Limited (ASX: WOW)

I think this retail conglomerate could be a good option for investors. Although best known for its supermarkets, Woolworths is also behind the likes of Dan Murphy’s, BWS, and BIG W. Combined, I believe the company is well-positioned to grow its earnings and dividends at a solid rate for the foreseeable future. Especially given its entrenched customer base and defensive business model.

More reading

• Are CBA shares in the buy zone?
• The ASX big bank stock most likely to outperform in the COVID-19 recovery
• Should you throw $3,000 into Altium shares today?
• Cochlear share price edges lower on patent infringement news
• 3 ASX shares to instantly diversify your portfolio

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended REA Group 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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