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10 of the best ASX dividend shares to beat low interest rates in 2020

According to the latest ASX 30 Day Interbank cash rate futures contracts, the market continues to forecast another cut by March.

Unfortunately for savers and income investors, this will take the cash rate down to a record low of 0.5%.

But don’t worry because the Australian share market is home to a large number of dividend shares that can help you beat low rates in 2020.

Here are 10 top dividend shares to look closer at:

Aventus Group (ASX: AVN)

I think Aventus is a good option for income investors. It is a leading owner and operator of large format retail centres across the country. This retail format continues to be popular with consumers, which has supported demand for tenancies and led to Aventus enjoying a sky-high occupancy rate. As a result, I feel it is well-placed for solid FFO growth in FY 2020. I estimate that its shares offer a forward 6.3% distribution yield.

BHP Group Ltd (ASX: BHP)

If you only invest in one miner I would choose BHP. I think it is the highest quality option in the sector thanks to its world class and low cost operations. These operations are generating significant levels of free cash flow, which management has been returning to shareholders through dividends and buybacks. I expect more of the same in FY 2020 and estimate that its shares currently provide a fully franked forward 6.1% dividend yield.

BWP Trust (ASX: BWP)

Another option for income investors to consider is BWP. Although this real estate investment trust may not be a familiar name, its tenant certainly is. BWP generates the majority of its income as the landlord of hardware giant Bunnings. Given the quality of its tenants and periodic rental increases, I believe it is well-positioned to grow its dividend at a solid rate over the coming years. At present its shares provide a trailing 3.5% distribution yield.

Coles Group Ltd (ASX: COL)

One of my favourite buy and hold options for income investors is this supermarket operator. This is due to its refreshed strategy and its focus on automation. These are expected to cut its costs significantly over the coming years and improve margins. Combined with solid sales growth, I expect this to lead to robust earnings and dividend growth. Currently I estimate that its shares provide a fully franked forward 3.7% dividend.

Macquarie Group Ltd (ASX: MQG)

A good alternative to the big four banks for investors could be Macquarie. I think it is one of the highest quality investment banks in the world and capable of growing its earnings at a solid rate over the long term. At present its shares offer a forward 4.5% partially franked dividend yield.

National Australia Bank Ltd (ASX: NAB)

But if you are looking to invest in the big four banks then NAB could be worth considering. Especially now the housing market is showing signs of rebounding strongly in 2020. If this happens it could drive solid mortgage loan growth and support NAB’s bottom line and dividends. I estimate that its share offer a 6% fully franked dividend yield at present.

Scentre Group (ASX: SCG)

Another quality option for income investors is Scentre Group. It is the owner of Westfield properties in the ANZ region. I believe these are amongst the best retail assets in the region and, with hundreds of millions of annual visitors, will always be in demand with retailers. In light of this, I feel its distribution can continue growing at a modest rate long into the future. At present its units offer a trailing 5.7% distribution yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

One of my favourite dividend shares is Sydney Airport. As the main gateway into Australia, Sydney Airport looks set to benefit from increasing international tourism. Another positive is that after several months of weakness, domestic tourism looks to be picking up. This could put the airport in a position to grow its dividend again in 2020. At present Sydney Airport’s shares offer a generous trailing 4.8% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

Another of my favourites is this telco giant. I think it is a top choice for income investors due to its improved outlook thanks to the return of rational competition, the arrival of 5G, and its T22 strategy. The latter is aiming to cut costs materially over the coming years. So much so, I believe a return to growth isn’t too far away for Telstra. Its shares currently offer a trailing fully franked 4.7% dividend. 

Transurban Group (ASX: TCL)

A final dividend share to consider in 2020 is this toll road giant. It remains one of my favourites due to the quality of its roads and their strong pricing power. Combined with increasing traffic and acquisitions and developments, I believe Transurban is well-placed to grow its distribution at a solid rate over the next decade. Its units currently offer a forward 4.25% forward yield.

In addition to the ten shares above, I have these outstanding ASX dividend shares on my shopping list for next year.

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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, Sydney Airport Holdings Limited, Telstra Limited, and Transurban Group. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT and 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.

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