Beat low interest rates with these ASX dividend shares

The Westpac Banking Corp (ASX:WBC) economic team expects rates to remain on hold until the end of 2023, so buy these ASX dividend shares…

| 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

Earlier today I revealed that the Westpac Banking Corp (ASX: WBC) economic team expects the cash rate to remain on hold until at least the end of 2023.

While this is good news for borrowers, it is another blow for income investors. They are likely to have to contend with low interest rates for a number of years to come.

Don't worry, though, because ASX dividend shares can help you beat low interest rates.

But which ones should you buy? Here are three ASX dividend shares I would buy:

Dicker Data Ltd (ASX: DDR)

The first quality option for income investors to consider is this leading distributor of information technology products. Dicker Data has been growing its earnings and dividends at a solid rate over the last few years. This has been driven by a combination of increasing demand and a growing number of vendor agreements. I believe it is well-placed to continue this trend over the coming years, making it a top long term option. Dicker Data's shares currently offer an estimated forward 5.4% dividend yield.

Rio Tinto Limited (ASX: RIO)

I think Rio Tinto is a great option in the resources sector. The mining behemoth recently released its first quarter update which revealed that it is on track to achieve its Pilbara iron ore shipments guidance in FY 2020. This is a big positive as management also advised that demand for high quality iron ore remains strong despite the coronavirus pandemic. I believe this bodes well for its profits and dividends this year and next. As a result, I estimate that its shares offer a forward fully franked 4.5% dividend yield.

Rural Funds Group (ASX: RFF)

Another dividend share to consider buying is agriculture-focused property group Rural Funds. I think it is attractive option due to its diverse portfolio of assets and their long term tenancy agreements. In respect to the latter, Rural Funds reported a weighted average lease expiry of 11.5 years with its half year results. The beauty of this is that it gives the company good visibility on its future earnings. As such, it has been able to provide guidance for its distributions in both FY 2020 and next year. Rural Funds expects to pay a distribution of 10.85 cents per share in FY 2020 and then 11.28 cents per share in FY 2021. This equates to yields of 5.6% and 5.8%, respectively.

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and RURALFUNDS STAPLED. 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 »