With the cash rate at the record low of 0.25% and tipped to remain at this level until at least the end of 2023, I think the share market remains the best place to earn a passive income.
Three top blue chip ASX dividend shares that I would buy for income are listed below. Here's why I think they are great options right now:
Coles Group Ltd (ASX: COL)
I think this supermarket operator's shares could be a good option for income investors because of its solid growth prospects and favourable dividend policy. In respect to its growth prospects, Coles look well-placed thanks to its cost reductions program, expansion opportunities, defensive qualities, and the return of rational competition. And with the company aiming to pay out between 80% and 90% of its earnings to shareholders, I estimate that its shares currently provide a fully franked forward 3.8% dividend.
Telstra Corporation Ltd (ASX: TLS)
Another option to consider buying for income is Telstra. I think Telstra is a great option due to its defensive qualities and improving outlook. In respect to its defensive qualities, these have been on display this year, with Telstra one of only a handful of companies that has been able to reaffirm its guidance. Looking further ahead, I believe Telstra's outlook is greatly improved and a return to growth could be on the horizon. This is because the NBN headwind is easing and peak pain is expected to be reached within the next 18 months. In the meantime, I expect a dividend of 16 cents per share in FY 2020, which equates to a fully franked 5.2% dividend yield.
Wesfarmers Ltd (ASX: WES)
A final dividend share I would buy is Wesfarmers. I like the conglomerate due to its high quality portfolio, solid growth potential, and sizeable cash balance. The latter is likely to be used by the Bunnings and Kmart owner to add to its portfolio in the coming years and underpin further growth. For now, I estimate that Wesfarmers' shares will provide a dividend yield of approximately 4% in FY 2021.
