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I would buy Commonwealth Bank and these ASX dividend shares

While it might be a little premature to say that the market has bottomed now, things are certainly looking a lot more positive for ASX shares.

This could make it worthwhile preparing a watchlist of shares that you wish to pick up when the time is right.

If you’re an income investor, I think these three top ASX dividend shares would be worth considering:

Coles Group Ltd (ASX: COL)

Few companies are benefiting from the coronavirus crisis as much as the supermarkets. This is due to panic buying which has stripped shelves bare consistently for weeks and increasing consumption at home because of self-isolating and working from home initiatives. In light of this, I expect Coles to deliver stronger than expected earnings and dividend growth in FY 2020 and FY 2021. Overall, combined with its defensive qualities, I think this makes Coles a great option for income investors. I estimate that its shares offer a forward fully franked ~4% dividend yield.

Commonwealth Bank of Australia (ASX: CBA)

The big four banks have fallen heavily this year due to concerns over how the coronavirus outbreak will impact the economy and ultimately their performances. Whilst I expect the banks to take a hit to both their earnings and dividends, I think the selling has been severely overdone. As a result, when the market settles, I would be picking up Commonwealth Bank’s shares if I were an income investor. Even after factoring in a likely dividend cut in FY 2020 and FY 2021, the bank’s shares offer an estimated forward fully franked 6.3% dividend yield.

National Storage REIT (ASX: NSR)

A final dividend share to consider is National Storage. It is one of the ANZ region’s largest self-storage providers with over 170 storage centres. From these centres National Storage offers a range of services including self-storage, business storage, climate-controlled wine storage, and vehicle storage. I suspect that the coronavirus crisis will lead to a drop in demand and a cut to its distribution over the next 12 months. However, due to a pullback in its share price, I still expect its shares to provide a forward distribution yield of ~5.3%.

Commonwealth Bank would be my top pick right now, but if you're not keen on the banks then check out this highly rated dividend share that has been named as the best on the market.

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*Returns as of 17/3/20

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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