The ASX dividend shares to buy during the coronavirus crisis

Commonwealth Bank of Australia (ASX:CBA) and these ASX dividend shares could be good options for income investors right now…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With interest rates at record lows and the long-term outlook for them remaining weak, I continue to believe the Australian share market is the best place to generate a passive income.

But which shares should you buy right now?

Whilst many dividends are being deferred or cancelled, I believe the three companies listed below are well-placed to continue paying them during the coronavirus crisis. Here's why I like them:

Coles Group Ltd (ASX: COL)

The first dividend share to consider is Coles. Due to being an essential service, the panic buying that swept through its supermarkets in March, and more people eating from home, I believe Coles is well-positioned for growth in FY 2020 and FY 2021. Another positive is its dividend policy which aims to pay out upwards of 90% of its earnings to shareholders. Combined, I believe Coles would be a great option for income investors right now and estimate that its shares offer a fully franked forward 4% dividend yield.

Commonwealth Bank of Australia (ASX: CBA)

Another dividend share to consider buying is Commonwealth Bank. Although I think all the big four banks are in the buy zone, it is my favourite option. After all, even if the other big four banks are cheaper, in times like these I feel it makes sense to stick with quality. And although Commonwealth Bank is very likely to take an axe to its dividend in the next 12 months due to the RBA cuts and the coronavirus outbreak, it should still provide an above-average yield. I estimate that its shares offer a forward fully franked ~6.1% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final option for income investors to consider is this telco giant. Telstra is one of the few companies on the ASX that has not withdrawn its guidance because of the coronavirus. In fact, the company is actually on track to achieve the low end of its FY 2020 guidance. I believe this demonstrates its defensive qualities. Based on its guidance, I believe it is positioned to maintain its 16 cents per share fully franked dividend. This equates to a generous fully franked 5% dividend yield.

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. 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.

More on ⏸️ Dividend Shares

A boy hold money and dressed in business suit next to money bags on a desk, indicating a dividends windfall
⏸️ Dividend Shares

The Accent (ASX:AX1) dividend has lifted by 22%

The company will reward shareholders with an increased dividend...

Read more »

a woman sits in the driver's seat of a car with her arm resting on the door with a small smile on her face, looking out of the car.
⏸️ Dividend Shares

Carsales (ASX:CAR) share price records a modest rise on dividend slash

Australia's largest online automotive and marine classifieds business notches a conservative share price rise on its latest report.

Read more »

A young entrepreneur boy catching money at his desk, indicating growth in the ASX share price or dividends
Bank Shares

ASX 200 bank shares to follow suit after CBA dividend hike: expert

Dividend investors rejoice! This expert expects more dividends to come from ASX 200 bank shares...

Read more »

sad looking petroleum worker standing next to oil drill
Share Fallers

AGL (ASX:AGL) dividend slashed. Share price down 3% on Thursday

More headwinds for the energy giant as its dividend is now in the spotlight.

Read more »

A girl looks through a microscope at money.
⏸️ Dividend Shares

The ANZ (ASX:ANZ) share price has only gained 10% in 5 years. But have the dividends paid off?

We do the math to see if it has been worth investing in ANZ shares over the long term...

Read more »

man laying on his couch with bundles of money and extremely ecstatic about high dividend returns
⏸️ Dividend Shares

The NAB (ASX:NAB) share price is flat 5 years on. But have the dividends paid off?

We calculate if it has been worth investing in NAB shares over the long run...

Read more »

two children dressed in business attire with joyous, wide-mouthed expressions count money at a desk covered in cash and sacks of money either side.
⏸️ Dividend Shares

Top-10 ASX dividend share delivers market-thumping share price gains

The Holy Grail for income stocks is to return strong capital gains as well

Read more »

happy woman looking at her laptop with notes of money coming out representing financial success and a rising share price and dividend yield
⏸️ Dividend Shares

Mining shares in the ASX 200 might unearth US$26b worth of dividends

Are shareholders about to dig some dividends?

Read more »