You’ve all heard the saying ‘cash is king’, but it really isn’t these days. Interest rates have been lowered by the Reserve Bank of Australia (RBA) to record lows and there seems to be a strong likelihood they will go lower still. So how are investors meant to deal with an RBA playing limbo with interest rates? Well, I think dividend shares is how. So here are three ASX dividend shares to buy for 2020 and beyond that will serve you a lot better than the deposed cash-king.
Woolworths Group Ltd (ASX: WOW)
Woolworths has been on a bit of a resurgence in 2019. The supermarket has impressed after its plans to spin-off its pubs and drinks business (as well as those nasty poker machines) were announced earlier this year and on the closer front, its new range of ‘Ooshie’ Lion King toys has shaken up the family trip to the supermarket. I particularly like Woolworths as it has shown an ability to consistently stay one step ahead of the competition and hold its market share in a highly competitive industry. WOW shares offer a 2.66% dividend yield on current prices.
Telstra Corporation Ltd (ASX: TLS)
I’m bullish on Telstra for a range of reasons. Firstly, the telco has a strong brand and a reputation for the best and most extensive mobile network – resulting in a market share above 50% in the mobile market. Further, I think if any ASX company is going to benefit from the rise of 5G (the ‘next big thing’ in telecom tech), it’s going to be Telstra. The company is already trialling its new 5G network and once flagship smartphones like the iPhone become 5G compatible, I expect we will start to see dividends from this investment (literally). In the meantime, Telstra is paying out a 4% yield on current prices.
Macquarie Group Ltd (ASX: MQG)
Rather than going for a “big four’ bank like Commonwealth Bank of Australia (ASX: CBA), I’m choosing Macquarie for a 2020 dividend stock. As sub-1% interest rates become the norm (and I expect it to stay this way for a while), asset management is only going to increase its appeal as investors seeking yield are forced into shares. Macquarie has been growing its asset management division rapidly over the past decade and is now amongst the top 50 global asset managers, making it a great stock (in my opinion) to hold for the next few years at least.
Further to this, the company also offers retail banking services like mortgages and term deposits, so you are getting a much more diversified ASX financial stock overall with Macquarie. MQG shares are offering a yield of 4.85% on current prices.
With these three companies, you have the foundation of a well-diversified dividend portfolio for 2020 and beyond. I can’t imagine an Australia without these companies around, and so am bullish on building an investment portfolio around them for the long term.
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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and 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.