The market selloff this month has undoubtedly been very disappointing for Australian investors.
However, one positive consequence of the selloff is that it has brought a number of shares down to levels that mean they now offer generous dividend yields.
Three top ASX dividend shares I would buy when the market settles are listed below:
Accent Group Ltd (ASX: AX1)
The shares of this footwear focused retail company have lost almost half of their value over the last two and a half weeks. This has been driven by a combination of general market volatility and concerns that the coronavirus could impact its supply chain and consumer demand. I think this has been an overreaction by investors and has left Accent Group’s shares trading at a dirt cheap level. Its shares are currently changing hands at 12x FY 2019 earnings and offer a very generous trailing fully franked 7.6% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
The big four banks have all been smashed over the last few weeks. Commonwealth Bank, for example, has fallen a whopping 24% since February 14. However, based on the progress being made in China, I’m optimistic that the coronavirus outbreak will be contained in the short to medium term and expect bank shares to bounce back strongly when this happens. This could make it worth considering an investment in Australia’s largest bank when things settle. Especially given its generous dividend yield. Even after factoring in a small cut to its dividend in FY 2020, its shares provide a forward fully franked 6.1% dividend yield.
Transurban Group (ASX: TCL)
A final dividend share to consider buying is Transurban. I think the toll road operator is a solid option for investors and expect it to continue to deliver solid earnings and distribution growth over the long term. This is thanks to the quality of its roads, their strong pricing power, and increasing traffic flows. They combined to help Transurban deliver a 8.6% increase in half year proportional toll revenue to $1,396 million last month. Management also reaffirmed its plan to increase its FY 2020 distribution to 62 cents per share, which equates to a yield of 4.2%.
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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 Transurban Group. The Motley Fool Australia has recommended Accent 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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