A number of popular income shares may have deferred or cancelled their dividends during the coronavirus pandemic, but there are still a handful of shares carrying on as normal.
Three top dividend shares that I expect to continue paying their dividends in the coming months are listed below. Here's why they could be the ones to buy when the market reopens next week:
BHP Group Ltd (ASX: BHP)
Due to its low-cost operations and very favourable iron ore prices, I believe this mining giant is a great option for income investors. This is because BHP is well-placed to generate significant free cash flow again in FY 2020. And due to the strength of its balance sheet, the majority of this is likely to be returned to shareholders in the form of dividends. I estimate that the miner's shares provide a fully franked forward ~5.5% dividend yield at present.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused property group. I think it would be a good option for income investors due to the quality of its assets and its positive long-term distribution outlook. The latter is thanks to its long-term tenancy agreements and periodic rent increases. An added bonus is that the company pays its distribution in quarterly instalments. This provides investors with a more regular source of income throughout the year. Rural Funds' units currently offer investors a trailing 4.8% distribution yield.
Wesfarmers Ltd (ASX: WES)
Since this conglomerate spun off the Coles Group Ltd (ASX: COL) business, its Bunnings business has become its biggest contributor to earnings. During the first half of FY 2020, the hardware business accounted for almost two-thirds of its earnings. The good news is Bunnings is experiencing very strong demand from consumers during the pandemic. This appears to have positioned Wesfarmers for solid growth during these difficult times. And with its balance sheet looking very strong following the partial selldown of its Coles stake, I believe it will grow its dividend in line with earnings. Based on this, I estimate that its shares offer a forward fully franked ~4% dividend yield.
