Unfortunately for savers and income investors, interest rates look set to stay at these ultra-low levels for some time to come.

The good news is that there are plenty of ASX dividend shares which will help you overcome these low rates.

But which ones should you buy? Two top ASX dividend shares I would buy today are listed below. Here’s why I like them:

BHP Group Ltd (ASX: BHP)

If you don’t mind investing in the resources sector, then I think this mining giant would be a great dividend share to buy. I’m a big fan of the Big Australian and believe it is well-positioned to generate strong free cash flows in FY 2020 and FY 2021. This is thanks to its low cost operations and favourable commodity prices. The latter is particularly the case for iron ore, which is currently trading above ~US$110 a tonne. As a comparison, BHP’s full year cost guidance is just US$13-14 per tonne at its Western Australia Iron Ore operation.

Looking ahead, I think the future is very positive as well. This is due to BHP having a number of growth opportunities which could create a lot of value for shareholders down the line. Based on the current BHP share price, I estimate that its shares offer investors a forward fully franked ~5% dividend yield.

Commonwealth Bank of Australia (ASX: CBA)

Investors that don’t have exposure to the banking sector might want to consider an investment in Commonwealth Bank. The shares of Australia’s largest bank are down 20% from their high and are trading at an attractive level for patient investors. And while times are certainly hard right now, I’m optimistic the worst is now behind the bank and the coronavirus provisions it has made are more than sufficient.

Furthermore, while I still expect a dividend cut in FY 2021, I don’t believe the cut will be as bad as some expect. I continue to forecast a fully franked dividend in the region of ~$3.70 per share next year. This would be a generous 5.1% dividend yield based on the latest Commonwealth Bank share price.

More reading

• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Could Fortescue and BHP shares climb higher in 2020?
• Is the BHP share price about to surge?
• Biggest dividend cuts in 10 years to hit ASX investors next month
• This could be a problem for the Afterpay share price

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 Why I would buy BHP and CBA shares for dividends appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) was well and truly on form on Wednesday and stormed notably higher. The benchmark index jumped 1.9% to 6,052.9 points.

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

ASX 200 expected to rise again.

The ASX 200 index looks set to continue its positive run on Thursday. According to the latest SPI futures, the ASX 200 is poised to open the day 22 points or 0.35% higher this morning. This follows another solid night of trade on Wall Street which saw the Dow Jones rise 0.9%, the S&P 500 jump 0.9%, and the Nasdaq climb 0.6%. Promising coronavirus vaccine news helped drive markets higher.

Moderna vaccine update.

U.S. markets charged higher overnight after biotech company Moderna provided an update on its coronavirus vaccine. According to CNBC, peer reviewed data published by the New England Journal of Medicine showed Moderna’s coronavirus vaccine produced a robust immune response in all 45 patients in its early stage human trial. This gave stocks directly tied to an economic reopening a real boost.

Oil prices jump.

It could be a good day for energy producers Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices jumped higher. According to Bloomberg, the WTI crude oil price is up 1.8% to US$41.00 a barrel and the Brent crude oil price has risen 1.7% to US$43.64 a barrel. A combination of the vaccine news and a stronger than expected inventory draw in the United States helped drive oil prices higher.

Gold price flat.

It looks set to be a mixed day for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) after another flat night of trade for the precious metal. According to CNBC, the spot gold price is unchanged at US$1,813.40 an ounce. The aforementioned vaccine news appears to have offset rising tensions between the U.S. and China.

Telstra rated as a buy.

Analysts at Goldman Sachs have been busy looking at how the second wave might impact Telstra Corporation Ltd (ASX: TLS). While it notes that its productivity plans may be delayed, it sees upside risk to medium term earnings. In light of this, the broker has held firm with its conviction buy rating and lifted its price target on the Telstra share price slightly to $4.10.

More reading

• ASX 200 jumps almost 2% today, Afterpay rises
• The dangers of investing in managed funds
• Why I would buy these blue chip ASX 200 shares this week
• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Is the Xero share price heading to $100?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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.

The post 5 things to watch on the ASX 200 on Thursday appeared first on Motley Fool Australia.

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