As every investor would (hopefully) know right now, the record low interest rates that have come to define this era of investing also translate into rock-bottom returns from both cash and bonds.
For some perspective, the interest rate you can expect to receive from a 10-year Australian government bond is currently around 1.28%. That means you are locking your money up for a decade, and not even being compensated for the effects of inflation for doing so. Doesn't sound like a great deal to me.
That's where ASX dividend shares come in. In my opinion, dividend-paying stocks are really the only conventional avenue you can go down these days (with the possible exception of property) for an inflation-beating return on your capital.
Here are 3 that I think are looking attractive today.
Woolworths Group Ltd (ASX: WOW)
I like Woolworths for its defensive nature, innovative marketing campaigns (remember the Lion King toys?) and customer loyalty. It's the only supermarket that has managed to maintain its market share in the face of competition from Aldi and others, so I think this shows Woolworths' quality.
Woolworths' current dividend isn't too impressive at 2.68%, but I think the supermarket's plans to spin-off its drinks business next year will lead to additional returns for shareholders, and higher dividends down the road.
Commonwealth Bank of Australia (ASX: CBA)
CommBank has a lot of new friends and admirers this year as it became the only ASX big four bank not to cut its generous dividend or franking credits. Thus, CBA's payout remains steady at $4.31 per share for 2019 – leading to a 5.4% yield on current prices. That's well over triple what you could expect from a CBA term deposit and makes this company a great buy for share market income, in my view.
Scentre Group (ASX: SCG)
Scentre is in the property business – more specifically, it owns all Westfield-branded shopping centres in Australia and New Zealand. Many investors are sceptical about the future of physical retail, but I think Scentre is doing a marvellous job of adapting its properties for the modern world, with a renewed focus on 'experiences' like outdoor dining.
Scentre is looking attractive from a dividend perspective too – SCG shares are currently offering a starting yield of 4.9%. With all this in mind, I think Scentre is a compelling choice for income today.
Foolish takeaway
With these 3 ASX dividend shares, I think we have three excellent choices that would put any bond or cash investments to shame in today's market.
