The COVID-19 pandemic has made it incredibly challenging for dividend investors. Many S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) shares have withdrawn guidance amidst the current economic uncertainty, or worse – withdrawn dividend payments all together.
Household dividend names shares such as Sydney Airport Holdings Pty Ltd (ASX: SYD) announced that no half year distribution will be paid while the likes of Transurban Group (ASX: TCL) continues to increase its debt position.
Given such uncertain circumstances, here are 3 ASX 200 dividend shares that I believe have safe dividends.
1. Woolworths Group Ltd (ASX: WOW)
Woolworths represents a business that will face prolonged earnings tailwinds amid the COVID-19 pandemic, as consumers will continue to stay indoors and cautious lockdown measures remain in place.
On 9 April, the company provided an interim dividend update. This update highlighted a 15.7% increase in normalised net profit after tax from continuing operations. The board's continued confidence in the outlook for the group is reflected in the interim dividend of 46 cents per share, up 2.2%. Woolworths currently has a fully franked dividend yield of 2.90%.
2. Ansell Limited (ASX: ANN)
Ansell is another example of a business that can be positioned front and centre to support countries affected by COVID-19. In the company's 1H20 update it outlined that it is heavily engaged in efforts to produce personal protective equipment for China. It is working closely with Chinese authorities to fast track its regulatory and import process to manufacture and allocate protective clothing.
The global shortage in protective personal equipment is likely to drive Ansell's earnings potential. It is currently paying an unfranked 2.50% dividend yield.
3. AGL Energy Limited (ASX: AGL)
Integrated energy business AGL represents an essential service that consumers simply cannot do without. Its core business in electricity generation and gas/electricity wholesale will continue to be in deman, regardless of the state of the economy.
In the company's 1H20 results, it announced an underlying earnings per share of 66.4 cents and interim dividend of 47 cents per share – representing a dividend payout ratio of approximately 70%. I believe that AGL represents a quiet business that can hold its ground in all economic conditions. While its share price may get caught in the volatility of the general market, its earnings will continue to be consistent, and likewise its dividend.
