If you're an income-seeker I can understand wanting to find good, reliable sources of dividends during this.
The Reserve Bank of Australia (RBA) has lowered the Australian interest rate to 0.25%. It's better than 0% or negative interest rates, but that doesn't earn much in the bank account.
Some classic ASX blue chips seem as though they have large dividend yields, but I can't imagine that the huge dividend yields will be maintained through the coronavirus problems. For example, the 14.8% grossed-up yield of National Australia Bank Ltd (ASX: NAB) looks too good to be true.
Here are some dividend shares I'd be looking at instead:
Brickworks Limited (ASX: BKW)
The diversified property business reported its result on Thursday and announced it was increasing its dividend by 5% whilst acknowledging that the coronavirus outbreak could cause issues in the short-term for the construction industry.
Brickworks has maintained or grown its dividend every year for over forty years. That's excellent reliability in my book, one of the best on the ASX.
It now has a grossed-up dividend yield of 5.5%. Its dividend and market capitalisation are essentially backed up by its divisions not relating to building products. The construction side is just a useful, large, bonus.
Rural Funds Group (ASX: RFF)
Rural Funds is my favourite real estate investment trust (REIT). It's a farmland landlord that owns a variety of farm types including cattle, cotton, vineyards, almonds and macadamias.
The REIT has an aim of increasing its distribution by 4% every year which is supported by contracted rental indexation, productivity investments at its farms and the occasional acquisition.
People need to keep eating food, including through pandemics. Rural Funds has already reaffirmed its FY20 profit expectations as well as its projected FY21 distribution of 11.28 cents per unit, which amounts to a forward distribution yield of 5.8% at the current price.
APA Group (ASX: APA)
APA Group owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). It owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation's natural gas usage.
Gas demand will remain important, particularly during the next six months if more people are staying home more rather than going out.
How reliable is APA as an income stock? It has grown its distribution each year over the past 15 years.
It currently has a trailing distribution yield of 5.9% including franking credits.
Foolish takeaway
All three shares are great options for income in my opinion. I particularly like Brickworks at the moment because it's trading so cheaply to the value of its underlying assets. And the best time to buy cyclical shares is when they're suffering through the low point of demand.
