Due to the coronavirus outbreak, a number of popular dividend shares have either deferred or cancelled their dividends.
In fact, over the last 24 hours dividend favourites Harvey Norman Holdings Limited (ASX: HVN) and Crown Resorts Ltd (ASX: CWN) did exactly that.
Harvey Norman has decided to conserve cash and cancel its interim dividend, while Crown Resorts has deferred its payment whilst it finalises a number of new financing arrangements.
While I expect most companies will continue paying dividends as normal again in the near future, investors looking for a source of income in 2020 may have to consider alternatives.
Three dividend shares which I expect to continue paying dividends as normal this year are listed below. Here's why I think they could be good options right now:
BHP Group Ltd (ASX: BHP)
I believe this mining giant is well-placed to pay another generous dividend in FY 2020. This is thanks largely to sky high iron ore prices. With prices at current levels, BHP's iron ore operations are generating high levels of free cash flow. The good news is that probable Chinese stimulus measures look likely to ensure that demand for the steel-making ingredient remains robust for the foreseeable future. I estimate that after the recent pullback in its share price, its shares offer a forward fully franked ~6% yield.
Telstra Corporation Ltd (ASX: TLS)
Income investors might want to take a look at this telco giant. Very few companies have been able to give guidance for FY 2020, let alone reaffirm it. But Telstra is one of the few companies that remains on track to achieve its guidance this year. And while it will be the low end of its FY 2020 guidance due to several initiatives to support the economy through the crisis, I believe it will be sufficient to maintain its 16 cents per share fully franked dividend. If this proves to be the case, then Telstra's shares offer a generous fully franked 5.1% dividend yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
A final safe option for income investors to consider buying during the coronavirus crisis is the Vanguard Australian Shares High Yield ETF. As its name implies, this exchange traded fund provides investors with exposure to a large number of dividend paying shares. The majority of which are the highest yielding shares on the Australian share market such as the big four banks. At present I estimate that it provides a forward ~80% franked 5.4% dividend yield.
