If you're looking for a source of income in this low interest rate environment, then the high yield dividend shares listed below could be the ones to buy.
Here's why I think these three ASX dividend shares are great options right now:
Commonwealth Bank of Australia (ASX: CBA)
The banks have fallen heavily this year amid concerns over how the coronavirus will impact their bad debts. While there are admittedly a lot of unknowns, I still feel the selling has been overdone. Especially for Commonwealth Bank which I believe is far more robust that the other three banks and down 33% from its high. In light of this, I think the pullback in its shares is a buying opportunity for investors that have limited exposure to the sector. I expect Commonwealth Bank to cut its dividend to ~$3.70 per share in FY 2021. Based on this, its shares offer an estimated forward fully franked yield of 6%.
Dicker Data Ltd (ASX: DDR)
Another dividend share to consider buying is this distributor of information technology products. It has been a very strong performer during the coronavirus pandemic and has just reported a 36.3% increase in first quarter net profit before tax to $18.4 million. This has been driven partly by increasing demand for software and hardware to support those working from home. As a result of this strong performance, Dicker Data advised that it intends to pay a fully franked dividend of 35.5 cents per share in FY 2020. This will be 31% higher than last year and equates to a fully franked 5.2% 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 the quality of its assets and its positive long-term distribution outlook. The latter is due to its long-term tenancy agreements and periodic rent increases included within them. An added bonus is that the company pays its distribution in quarterly instalments. This provides investors with a regular source of income throughout the year. Rural Funds' units currently offer a forecast 5.6% distribution yield.
