Looking for strong dividends in 2020?
Well, they’re not as easy to find as it might have appeared in January or February. Since the outbreak of the coronavirus and subsequent economic lockdowns, a huge range of ASX blue-chips announced dividend cuts or even cancellations.
But I think there are still some companies out there that offer a solid dividend outlook for 2020 and beyond (although anything is possible). So here are three ASX shares that (in my opinion) won’t have to cut their shareholder payouts this year.
Coles Group Ltd (ASX: COL)
Coles was the face of defensive ASX companies as the coronavirus pandemic took hold. Consumers flocked to Coles and other supermarkets to stock up on essentials, which initially saw Coles post a 12% rise in sales for the first quarter of FY20 last month. Although I suspect demand has returned to more normal levels since, it certainly proved how useful being a consumer staples giant can be in tough times.
As such, I think Coles’ dividends will continue to flow in 2020 (and might even get an increase). On current prices, you can expect a trailing dividend yield of 2.75% from Coles shares – or 3.93% grossed-up with full franking.
Fortescue Metals Group Ltd (ASX: FMG)
Fortescue is one of the largest iron ore mines in the country and has amassed a reputation as a strong dividend payer in recent years. Even on current prices (which are at record highs today), Fortescue has a trailing dividend yield of 7.23% – or 10.76% grossed-up with full franking.
Right now, iron ore is a great business to be in. The iron ore price hit US$91.90 today and looks to push even higher after production issues emerged in Brazil. If these prices hold (or even if they don’t), Fortescue should be able to shovel even more cash out the doors in 2020.
WAM Research Ltd (ASX: WAX)
WAM Research is a Listed Investment Company (LIC) that specialises in finding undervalued growth companies. It has a long and strong history of paying fully franked dividends, which, at the time of writing, give WAX shares a trailing yield of 7.33% (or 10.47% grossed-up).
But the best part of this story is that this LIC has plenty of gas left in the tank to continue to pay these dividends. Its most recent interim dividend came out at 4.9 cents per share – well covered by the company’s profit reserves of 26.2 cents per share. That’s a big buffer for dividend payments to carry us through 2020!
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Motley Fool contributor Sebastian Bowen owns shares of WAM Research 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.
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