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5 ASX dividend shares to beat low rates in 2020

With interest rates likely to go even lower next year, I think now would be a good time for income investors to think about how they plan to generate sufficient income in 2020.

Five top dividend shares that I feel would be great options for investors next year are listed below. Here’s why I rate them as buys for 2020:

Australia and New Zealand Banking Group (ASX: ANZ)

Whilst all of the big four could be good options, my favourite in the banking sector is ANZ. This is due to its attractive valuation, generous dividend yield, and strong capital position. At present ANZ’s shares offer a trailing fully franked 5.75% dividend yield.

BHP Group Ltd (ASX: BHP)

If you’re interested in resources shares, then my top pick in the sector is BHP. It is my favourite due to its world class operations and the high levels of free cash flow they are generating. I expect management to return the majority of its free cash flow to shareholders in the form of dividends and buybacks. In light of this, I estimate that its shares currently provide a fully franked forward 6.2% dividend yield.

Macquarie Group Ltd (ASX: MQG)

If you’re wanting exposure to the banking sector but you’re not a fan of the big four banks, then I think Macquarie could be a good alternative. I believe it is one of the highest quality companies in the country and a great long term option. Its shares currently offer a partially franked dividend yield of 4.3%.

Scentre Group (ASX: SCG)

Another option for income investors is Scentre Group. It is the company that owns the Westfield properties in the ANZ region. Due to the quality of these assets and the strong demand it has for tenancies, I feel it is well-placed to grow its distribution at a steady rate over the next few years. At present its units offer a trailing 5.8% distribution yield.

Transurban Group (ASX: TCL)

A final dividend share to consider buying is this toll road giant. I think it could be a great option for income investors due to the quality of its assets, their strong pricing power, and its long track record of distribution increases. In FY 2020 the company will lift its distribution to 62 cents per security. This equates to a forward 4.2% forward yield.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Transurban Group. The Motley Fool Australia has recommended Scentre 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.