With the cash rate at a record low and unlikely to improve for some time, it is becoming increasingly difficult for investors to generate a sufficient income from traditional interest-bearing assets.
Don’t worry, because despite the coronavirus crisis, there are still a good number of ASX shares offering generous dividend yields.
Three top dividend shares that I would consider buying in April are listed below:
Coles Group Ltd (ASX: COL)
On Tuesday this supermarket giant’s shares crashed 10% lower after Wesfarmers Ltd (ASX: WES) announced that it was selling down its stake. I think this is a buying opportunity for income investors. Especially given how Coles remains one of only a handful of companies that are benefiting from the coronavirus crisis. So much so, I expect Coles to deliver strong earnings and dividend growth in both FY 2020 and FY 2021. Based on this, I estimate that its shares offer a forward fully franked ~4% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
My favourite big four bank to buy right now is the Commonwealth Bank. I think it is the highest quality bank in the country and trading at a very attractive level after a recent pullback. And while the coronavirus outbreak is likely to weigh heavily on its performance in the near term, I believe this is more than priced in by the market. And even after accounting for a probable dividend cut, I still estimate that its shares offer a forward fully franked ~6.3% dividend yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
In the current environment where companies are deferring or cancelling their dividend payments, it certainly pays to have a diverse holding of income shares. But if you don’t have the funds to spread around a large number of shares, then the Vanguard Australian Shares High Yield ETF could be a great alternative. It gives investors exposure to a large number of the highest yielding dividend shares the ASX has to offer. This includes mining and banking giants, and the likes of Telstra Corporation Ltd (ASX: TLS) and Wesfarmers. At present I estimate that it provides a forward ~80% franked 5.4% dividend yield.
These 3 stocks could be the next big movers in 2020
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In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers 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.