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3 top ASX dividend shares to beat low interest rates

With the Reserve Bank of Australia (RBA) holding off on an interest rate cut this month, many income investors might have been relieved. But, according to most market commentators, this relief is probably short-lived – and it’s now a question of when and not if the next rate cut will come. Some are even predicting the cash rate will be at 0.25% by this time next year.

So, what are investors to do about this new paradigm? In my opinion, finding quality dividend shares is the best answer. Dividend shares may soon be the only asset that will give you an inflation-beating yield, so picking the right ones is of paramount importance.

Here are three ASX dividend shares I think might be worthy of consideration for your dividend portfolio

Telstra Corporation Ltd (ASX: TLS)

Telstra has recently made headlines by cutting its final dividend to 8 cents per share, but I think that this is where the pain ends. The company has made it clear that the NBN is digging a mighty hole in its earnings, but this pain will be over in a few years and we should see a return to earnings growth then. In the meantime, the company has an ambitious cost-cutting plan in place and is still offering a 4.52% yield on current prices, making this a great stock to own for income in my opinion.

Commonwealth Bank of Australia (ASX: CBA)

CommBank shares have been having a mini revival in the last three weeks, rising more than 8% since mid-August. Investors are clearly putting the company’s rather disappointing 2019 financial year results in the rear-view mirror. I still think there is a lot to like with our nation’s biggest bank – strong brand loyalty, unbeaten scale and pricing power and a healthy 5.4% dividend yield make this stock (in my opinion) a great long-term hold for an income portfolio.

Stockland Corporation Ltd (ASX: SGP)

Stockland is a REIT (Real Estate Investment Trust) that owns a diverse portfolio of property assets including shopping centres, retirement villages, industrial parks and housing estates. Property is often a neglected area for dividend investors, but Stockland is currently offering a 6.3% yield on a base of quality and diversified assets. For this reason, I think Stockland is a great stock to add to an income portfolio.

Foolish takeaway

I think all three of these ASX companies would serve any income investor well in these low-rate times. I think Stockland is offering the best value today, but Telstra has also dipped recently, so you might be able to grab a bargain there too!

Also consider the Motley Fool's favourite dividend shares for income here!

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. 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.

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