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The ASX dividend shares to buy during the coronavirus crisis

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 Telstra is one of the few companies on the ASX that has not withdrawn its guidance because of the coronavirus.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.

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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.