3 top ASX dividend shares looking cheap today

Westpac Banking Corp (ASX: WBC) shares are one of the cheap ASX dividend stocks I would buy today for income

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With interest rates dramatically falling this year to a record low of 0.75%, ASX dividend shares have seen a surge in interest and pricing. Falling 'risk-free' rates of return have seen investors reliant on yield pushed more and more away from bonds and cash and into the share market (albeit reluctantly).

This partly explains why many dividend shares have seen huge price gains over the year so far, but there is still bargains out there!

Here are 3 ASX dividend shares I think are looking cheap today

Telstra Corporation Ltd (ASX: TLS)

Telstra shares have come off the boil recently after rising over 44% between January and August. TLS shares topped out at a new 52-week high of $4 but have since slumped back to the $3.61 mark we see today. Despite this, Telstra is offering investors a starting yield of 4.44% (6.34% grossed-up).

I think the Telstra dividend has now been cut to a sustainable level, and this yield is a compelling reason to own this telco, especially considering its defensive nature.

Westpac Banking Corp (ASX: WBC)

Although Westpac shares are up 18% for the year so far, I still don't think WBC shares are looking overly expensive today, considering their price-to-earnings ratio of 12.5 and a current dividend yield of 6.51% (9.3% grossed-up).

Such a strong yield makes this stock a compelling buy for income today (it certainly beats the pants off any Westpac savings account right now). However, I do think Westpac may follow its banking cousin National Australia Bank Ltd (ASX: NAB) and trim its dividend in the near future – something to keep in mind.

AGL Energy Limited (ASX: AGL)

Here we have another dividend stalwart being priced for a no-growth future. AGL shares are trading on just 13.9x earnings, with a dividend yield of 6.21%.

Although I don't think this company has a stellar growth runway ahead of it, the share price is currently a bargain for yield (in my opinion) – especially considering this company is trading around the same level as three years ago. You could do a lot worse for a defensive, high-yield stock than AGL on current prices!

Foolish takeaway

Although cheap stocks are usually priced so for a reason, I think these 3 ASX dividend shares are undervalued and in the bargain bin today. In this low-rate world, you have to get your yield kick somewhere, after all.

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank 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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