The Motley Fool

3 high quality ASX dividend shares to buy right now

If you’re looking for a source of income in this low interest rate environment, then the dividend shares listed below could be good options for you.

Here’s why I think these three ASX dividend shares are in the buy zone right now:

Coles Group Ltd (ASX: COL)

One of my favourite dividend shares on the Australian share market is Coles. I’m a big fan of the supermarket operator due to its defensive qualities and solid growth prospects. The latter is thanks to its leading position in the industry and its refreshed strategy. The latter will see Coles aim to deliver $1 billion in cumulative savings by FY 2023. It expects to achieve this through efficiencies and the use of automation. I expect this and its same store sales growth to support solid earnings and dividend growth over the next five years. At present I estimate that its shares offer a forward 3.9% dividend yield.

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 its positive long-term distribution outlook. Rural Funds has good visibility on its future earnings thanks to its long-term tenancy agreements and the periodic rent increases that are built into contracts. Pleasingly, the company has been unaffected by the coronavirus pandemic and reaffirmed its distribution guidance this month. Rural Funds expects to pay 10.85 cents per share in FY 2020 and 11.28 cents per share in FY 2021. This equates to yields of 5.7% and 5.9%, respectively.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option for income investors to consider buying right now is the Vanguard Australian Shares High Yield ETF. I like this exchange traded fund due to its diversity and generous yield. This is because the fund invests in many of the most popular and highest yielding dividend shares on the ASX. This includes mining giants, the big four banks, and Telstra Corporation Ltd (ASX: TLS). At present I estimate that it provides a forward ~80% franked 5.3% dividend yield.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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 RURALFUNDS STAPLED and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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.

Related Articles...