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ASX dividend shares are the only answer for income needs

I think that ASX dividend shares are now the only answer for people looking for income.

The Reserve Bank of Australia (RBA) just cut interest rates again to 0.25%. Is that good news? It’s probably not a good sign that the RBA needed to do it. The RBA is doing what it can to help the economy.

For borrowers it’s a good thing that the interest rate is lower. It means people don’t have to pay as much to the bank.

But for people relying on income, that income has almost evaporated. Earning 0.25% from the bank isn’t going to be much use.

Property has low yields on offer and tenants may be less reliable during times like this.

Why ASX dividend shares are the only answer

With the interest rate so low, it’s clear that the attractiveness of ASX dividend shares is higher – particularly with how much share prices have gone down (and how much yields have risen).

There are some dividend shares I wouldn’t be so confident about them maintaining their dividends like Commonwealth Bank of Australia (ASX: CBA), Woodside Petroleum Limited (ASX: WPL) and BHP Group Ltd (ASX: BHP).

However, there are several dividend shares with solid histories:

APA Group (ASX: APA) has a distribution yield of 5%.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 5.9%.

Growthpoint Properties Australia Ltd (ASX: GOZ) has a distribution yield of 8.75%.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 5.1%.

Ramsay Health Care Limited (ASX: RHC) has a grossed-up dividend yield of 4%.

Foolish takeaway

Plenty of dividend shares still offer a solid income stream, as long as you invest in the right places for income payments.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended Brickworks and Ramsay Health Care 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.