Income: 3 ASX dividend shares to buy

Commonwealth Bank of Australia (ASX:CBA) and these ASX dividend shares could be great options for income investors right now…

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Fortunately, in this low interest rate environment, the Australian share market is home to a large number of quality dividend shares.

Three that I think would be great option for investors right now are listed below. Here's why I like them:

Commonwealth Bank of Australia (ASX: CBA)

My favourite option among the big four banks is the Commonwealth Bank. I think it is the highest quality bank in the group with the strongest business and the brightest prospects. Until recently I felt its shares were a little on the expensive side. But due to a sharp pullback in recent weeks, I think its shares are now undervalued. This could make it worth considering if you don't already have exposure to the banking sector. Especially if you're looking for a source of income. Even after factoring a dividend cut, I estimate that its shares still offer a forward fully franked 6.5% dividend yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF allows investors to gain exposure to a large number of the highest yielding shares on the Australian share market. This diverse group includes the likes of BHP Group Ltd (ASX: BHP), Telstra Corporation Ltd (ASX: TLS), and the big four banks. Given how many dividend shares have been deferring payments or outright cancelling dividends, this ETF is certainly growing in appeal in my eyes. Its units currently provide investors with an ~80% franked 5.4% dividend yield.

Wesfarmers Ltd (ASX: WES)

A final option for income investors to consider is Wesfarmers. Although the coronavirus outbreak could impact its financial performance in the short term, I believe it remains well-positioned for solid long term growth. This is thanks to the quality and diversity of its portfolio of businesses and management's track record of earnings accretive acquisitions. For now, I estimate that Wesfarmers' shares offer investors a forward fully franked 4.6% dividend yield.

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. 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.

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