Finding top dividend-paying ASX shares is a hard ask these days. We’ve already seen dozens of ‘blue chips’ cut, defer or cancel dividend payments in 2020, including Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC) and Sydney Airport Holdings Pty Ltd (ASX: SYD).

I’m sure we’ll see a lot more by the end of the year, too.

So with this in mind, here are 3 ASX dividend shares that I think will make excellent choices for income in 2020.

Australia Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) that has been around since the 1920s. Since then, it has developed a reputation for conservative, broad-based investing with a focus on delivering fully franked dividends.

I think AFIC is well positioned to continue this tradition in 2020. Management has rotated away from ASX bank shares in recent months, with only Commonwealth Bank of Australia (ASX: CBA) appearing in the company’s top 5 holdings. Replacing them are shares like CSL Limited (ASX: CSL) and BHP Group Ltd (ASX: BHP)

On current prices, AFI shares are offering a trailing dividend yield of 4.16%, or 5.94% grossed-up.

Coles Group Ltd (ASX: COL)

Coles is another ASX blue chip that I expect to deliver strong dividend payments in 2020 and beyond. We all saw the rush on Coles and other supermarkets in the early stages of the coronavirus pandemic.

This ended up leading to a 12% sales bump for Coles in the quarter ending 31 March 2020. Coles has a dividend payout policy of 80–90% of earnings, so these sales should somewhat underpin its dividend payments for the rest of the year.

On current prices, Coles shares are offering a trailing dividend yield of 2.75%, or 3.93% grossed-up.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This exchange-traded fund (ETF) is designed to maximise exposure to the ASX’s best dividend-paying shares. As such, it holds a basket of 62 shares that service this goal.

Much like AFIC, VHY’s portfolio has recently adapted to 2020 conditions by transitioning away from the ASX banks into more reliable dividend shares. I think this flexibility is a great asset during these uncertain times, and I like that management has been agile in this respect. Its top holdings now include BHP and Wesfarmers Ltd (ASX: WES).

The trailing dividend yields from ETFs can be a little more unreliable than individual ASX shares, but VHY brings it in at 6.7% for the trailing 12 months. Vanguard estimates VHY’s forward yield at 5.6% or 7.7% grossed-up.

More reading

• 3 strong ASX 200 shares to buy for a retirement portfolio
• ASX 200 Weekly Wrap: ASX rallies on mining highs
• How to reduce your work to part-time using ASX shares
• Why I would buy these quality ASX dividend shares today
• 3 super strong ASX 200 blue chip shares to buy right now

Sebastian Bowen owns shares of Vanguard Australian Shares High Yield Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, and 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.

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I think that high yield dividend shares could be the answer for income during these times.

The problem for some investors is that solid dividend shares like APA Group (ASX: APA) have seen the yield compressed as the share price rises.

Dividend shares with high yields may be able to boost your portfolio’s overall yield enough to get through this period.

Here are three ideas:

WAM Leaders Ltd (ASX:WLE)

This is a listed investment company (LIC) which invests in the larger businesses on the ASX.

It’s not necessarily a longer-term investor, so it may not matter that many of the biggest shares are cutting their dividends due to the coronavirus. WAM Leaders can make money from just the capital gain profits.

It can then turn those capital gains into a growing dividend for shareholders. It’s run admirably by lead portfolio manager Matthew Haupt.

WAM Leaders qualifies as a high yield dividend share because it has a grossed-up dividend yield of 8.8%.

WAM Research Limited (ASX: WAX)

This is another LIC operated by the investment team at Wilson Asset Management. This one is looking for small and medium growth shares on the ASX.

Again, most of the profits generated will come from capital growth rather than dividends from its owned shares.

Prior to the coronavirus sell-off, it was one of the best-performing LICs out there over the long-term. I think it could be one of the best again in the 2020s. 

I can’t think of many high yield dividend shares that would have paid out as much as WAM Research over the past decade. It started with a high yield and it has increased the dividend every year since the GFC.

WAM Research qualifies as a high yield dividend share because it has a grossed-up dividend yield of 10.4%.

Challenger Ltd (ASX: CGF)

Challenger is the Australian market leader of annuities. If someone takes out an annuity in Australia it’s likely to be a Challenger one, or at least a white label Challenger product.

The ageing demographics are on Australia’s side as more people are heading towards retirement over the next couple of decades.

Challenger is a high yield dividend share. But remember that a dividend is not an annuity, it’s not guaranteed. But Challenger did maintain its dividend during the GFC and with its normalised profit seemingly stable, Challenger may be able to keep paying its grossed-up dividend of 10.5%.

Foolish takeaway

All three of these shares have high dividend yields and could really boost your income. The low interest rate is probably problematic for Challenger for the longer-term, so with that in mind I’d probably go for WAM Research at this stage for its large dividend yield, the focus on growth and good portfolio diversification.

More reading

• Replace your term deposit with these dividend shares
• How I would build a $130,000 ASX dividend portfolio right now
• Here are 2 ASX dividend shares with yields over 10%
• My 3 best ASX dividend shares to buy right now
• These are the ASX blue chips I’d buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of APA Group. 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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Joe Rogan has the hottest podcast in entertainment media. Last week, we learned it would be hosted exclusively on Spotify’s platform. Its share price jumped immediately. Today, the Foxtel Binge streaming service launched here in Australia. The tectonic plates of the media industry are shifting again, and not everyone is going to make it through.

There are 3 major ASX entertainment media shares that generate and distribute news: News Corp (ASX: NWS), Nine Entertainment Co Holdings Ltd (ASX: NEC), and Seven West Media Ltd (ASX: SWM). Whichever is the first mover will be the better investment. 

Replacement revenue

When REA Group Limited (ASX: REA) and SEEK Limited (ASX: SEK) started to eat into classified revenues, it was News Corp that acted first. Today, News Corp owns 62% of REA Group, which is one of the better value companies on the ASX, in my opinion.

Fairfax also launched and spun off Domain Holdings Australia Ltd (ASX: DHG), which is also a real estate classifieds service. Nine Entertainment holds 52.9% of Domain through its acquisition of Fairfax. Domain is a far more lacklustre version of REA, however. Today it is 1/11th of the size by market capitalisation. There is a lot of market share it can capture, but it just doesn’t seem interested at the moment.

None of the major ASX entertainment media shares have a significant stake in car classifieds online company Carsales.Com Ltd (ASX: CAR). Given recent history, this would appear to be a mistake. 

Seven West Media is in the early stages of a range of online and technology investments. None, however, can challenge the revenue replacement streams of Nine or News Corp. 

Entertainment media diversity

All entertainment media companies own newspapers, television channels and radio stations. However, News Corp stands out as the 65% owner of Foxtel, and the 100% owner of 24-hour news channel Sky News. This provides it with exposure through Foxtel to the new Binge streaming service, should it prove successful.

In the realm of radio, Nine Entertainment has both 3AW in Melbourne and the revenue juggernaut of 2GB in Sydney. It has recently lost revenue generator Alan Jones as a presenter, but he will be replaced by the affable and popular Ben Fordham. 

Seven West has launched an innovative product in its new morning podcast The West Live with Jenna Clarke. This has had a monster reception in the West and has sidestepped local radio. They regularly have the Premier, state ministers, federal ministers, local mayors, as well as local entrepreneurs and billionaires. I listen to it daily and already many of my colleagues and friends have discovered it by themselves.

Management

Of all of the 3 ASX entertainment media shares, the financial history of News Corp Australia is the most compelling. Seven West Media and Nine Entertainment are the least compelling – across all major valuation metrics they have gone backwards for 10 years. News Corp, on the other hand, has been able to grow cashflow at a compound annual growth rate of 13.4% for the past 7 years. 

Foolish takeaway

I am a big believer in the future of the news business in all of its forms. In my view, Spotify’s Rogan deal, The West Live podcast, and the move to streaming shows there is the potential for one of the incumbent ASX entertainment media shares to make very big strides into the future. It depends which one moves first. 

More reading

• Is the REA Group share price a buy?
• 3 super strong ASX 200 blue chip shares to buy right now
• Got $10,000 to invest? I would buy these ASX shares right now
• How to become a millionaire with a $5,000 investment in ASX 200 shares each year
• Investing $1,000 in these 3 ASX shares would be a smart move

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited, Nine Entertainment Co. Holdings Limited, REA Group Limited, and SEEK 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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If you’re approaching retirement, then now might be the time to start focusing on capital preservation and income rather than chasing gains.

But which shares should you buy? I believe the three shares listed below could be great additions to a well-balanced retirement portfolio. Here’s why I like them:

Coles Group Ltd (ASX: COL)

The first company I would consider adding to a retirement portfolio is Coles. I think the supermarket operator is one of the most defensive shares on the ASX. This is because the bulk of its earnings come from its supermarkets which, as we have witnessed this year, traditionally perform well regardless of that is happening in the rest of the economy. Another reason for retirees to consider buying Coles is its dividend. With management aiming to pay out upwards of 90% of its earnings to shareholders, I believe its dividend can grow materially over the next decade or two

Goodman Group (ASX: GMG)

Another option to consider for a retirement portfolio is Goodman Group. It is an integrated commercial and industrial property group which owns, develops, and manages industrial real estate in 17 countries. I like the company due to the diversity of its operations and its exposure to quick growing markets such as ecommerce. Overall, I believe it is well-positioned to deliver solid earnings and distribution growth for a long time to come.

Woolworths Limited (ASX: WOW)

This retail conglomerate could be another good option for a retirement portfolio. I like Woolworths due to its strong brands, entrenched customer base, and defensive qualities. Combined, I believe they have positioned the company perfectly to deliver robust earnings and dividend growth over the next decade and beyond. And while its shares don’t provide the biggest dividend yield, a fully franked 2.9% yield is not to be sniffed at in this low interest rate environment.

More reading

• Top brokers name the latest ASX 200 stocks to sell today
• These ASX 200 share prices were cut in half. Where are they now?
• Leading brokers name 3 ASX 200 shares to buy right now
• ASX 200 up 1.7%: Flight Centre and Webjet rocket, Afterpay hits record high
• Telstra share price down 21% since February. Is it now in the buy zone?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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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The threat of a new cold war between China and US allies aren’t enough to dent the positive mood on our market.

The S&P/ASX 200 Index (Index:^AXJO) jumped 1.5% during lunch time trade as confidence about the post-coronavirus recovery grows.

But rebounding share prices might be an opportunity to take some profit off the table or to lock in tax-losses to offset FY20 capital gains. Here are the latest sell ideas from top brokers.

Losing bet

One stock in the firing line is Tabcorp Holdings Limited (ASX: TAH) as Citigroup initiated coverage on the lottery and wagering group with a “sell” recommendation.

The broker believes the stock is facing a growth challenge as the run of big lottery jackpots that have driven past sales is running out of puff.

The closure of wagering outlets due to the COVID-19 pandemic and an uncertain sports betting outlook are other factors weighing on the stock.

Lottery earnings aren’t that stable

The view that Tabcorp’s lottery business deserves to trade at a big premium to the market as it’s seen to be as dependable as infrastructure assets is also misguided, according to Citigroup. This is because lottery sales fluctuate with discretionary spending, surge and ebb with jackpots and have no inflation protection.

If the group wants to break out of its low growth rut, it will need to either expand into the US sports betting market, enter Western Australia lotteries, open new wagering outlets in WA and New Zealand and internalise online lotteries.

That last point will be especially worrying for Jumbo Interactive Ltd (ASX: JIN), in my view. It suggests Tabcorp might stop Jumbo from selling lotteries so it can monopolise the channel.

Citi’s price target on Tabcorp is $2.80 a share.

Time to sell

Meanwhile, the surge in the Afterpay Ltd (ASX: APT) share price to a new record high today could be a signal to sell, if you believe UBS.

The broker reiterated its “sell” recommendation on the buy now, pay later group even after management reported having five million active customers in the US.

The COVID-19 shutdown that is driving a spike in online sales provides an additional tailwind to Afterpay as 76% of its Australia and New Zealand sales were done via the web in 1HFY20.

“While we think COVID-19 could accelerate positive structural changes for APT, we are cautious to extrapolate the magnitude of recent growth in online’s share given the recent forced closures of shops,” said the broker.

Priced beyond perfection

Further, while the latest update from Afterpay is better than most were expecting, UBS thinks the good news is more than priced into the stock.

The broker is assuming Afterpay will secure 9.7 million active users by June, which is higher than management’s withdrawn guidance of 9.5 million.

Even on the more optimistic projection, UBS reckons fair value for Afterpay is $14 a share. That is a long drop from the nearly $48 level the stock is currently trading at.

More reading

• 3 strong ASX 200 shares to buy for a retirement portfolio
• These ASX 200 share prices were cut in half. Where are they now?
• The Afterpay share price just hit a new record high: Should you invest?
• Should ASX 200 investors want share buybacks or dividends?
• Leading brokers name 3 ASX 200 shares to buy right now

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Jumbo Interactive 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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Between 20 February and 23 March 2020 the S&P/ASX 200 Index (ASX: XJO) plummeted over 36%. Many ASX 200 shares have since rebounded considerably, however, and the index is now trading at around 5,590 points. Notwithstanding this partial recovery, current levels still represent a 22% discount to the February high.

Some of the biggest ASX 200 share price declines

Certain industries and individual ASX 200 shares have seen significantly greater declines than the index overall. Many of these declines were directly attributable to the economic fallout resulting from coronavirus. For example, with no certainty around international and domestic travel, it wasn’t surprising to see travel stocks like Sydney Airport Holdings Pty Ltd (ASX: SYD) down more significantly than the ASX 200 average.

Following are 2 further stocks that have garnered much attention for their colossal decline during the recent bear market. We’ll look at why they were down so much and where they are now. It’s interesting to observe the extent of these market swings which, in hindsight, often indicate that investors were overly pessimistic at the time. Having said that, only time will eventually tell whether those bears were, indeed, right or wrong.

Afterpay Ltd (ASX: APT)

There’s no denying Afterpay’s market darling status in recent years. For those growth investors savvy enough to jump on board, it has delivered highly impressive returns. During the bear market, Afterpay’s shares fell from $40.50 to $8.90, representing an immense 78% decline! 

As a highly valued, consumer facing company undergoing an international expansion, investors were concerned retail spending would fall off a cliff and fees wouldn’t be recoverable due to COVID-19 restrictions across Afterpay’s markets.

To date, however, investors’ fears surrounding the company are yet to materialise. Afterpay is helping both retailers and consumers weather the coronavirus restrictions via online sales and its share price hit an all-time high of $49 today. Currently trading at $48.14 at the time of writing, this represents a massive 441% above the 23 March low!

Webjet Limited (ASX: WEB)

With virtually no travel occurring either domestically or internationally, Webjet has seen its business fly away. Shares fell from $10.44 on 23 January to as low as $2.25 on 22 April. A 78% decline! 

Webjet went to the capital markets early, and at a significant 55% discount, in order to shore up its balance sheet. The company raised a combined $346 million from a retail and institutional capital raising at $1.70 per share. 

Since then, with COVID-19 restrictions slowly lifting, investors have been gradually bidding up the Webjet share price. Shares are currently trading at $4.12 each, an impressive 83% above last month’s low.

Foolish takeaway

When the market is facing angst and uncertainty, the likes of which we have experienced recently, many ASX 200 shares decline far more significantly than is warranted by their long-term fundamentals. This can provide amazing investment opportunities if you have the means and the stomach to be bullish while others are retreating in fear. 

More reading

• 3 strong ASX 200 shares to buy for a retirement portfolio
• Top brokers name the latest ASX 200 stocks to sell today
• Why Flight Centre and Webjet shares are zooming higher today
• The Afterpay share price just hit a new record high: Should you invest?
• Leading brokers name 3 ASX 200 shares to buy right now

The post These ASX 200 share prices were cut in half. Where are they now? appeared first on Motley Fool Australia.

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