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3 ASX dividend shares I would buy to beat low rates

With the cash rate at a record low of 0.25% and unlikely to change any time soon, the interest rates on offer with term deposits and savings accounts look set to stay lower for longer.

In light of this, I think income investors ought to consider investing in some of the quality dividend shares on the ASX.

Three that I would buy next week are listed below:

Dicker Data Ltd (ASX: DDR)

Dicker Data is a leading wholesale distributor of computer hardware and software. I think it is one of the best dividend shares on the local market and doesn’t get the recognition it deserves. Especially given how it has consistently grown its earnings and dividends at a solid rate for many years now. Pleasingly, this positive trend has continued in 2020 despite the crisis. Management recently revealed strong first quarter profit growth and plans to lift its full year dividend by 31% to 35.5 cents per share. This represents a 4.75% fully franked dividend yield.

Macquarie Group Ltd (ASX: MQG)

Another dividend share to consider buying is this investment bank. I like Macquarie due to the quality and diversity of its earnings and its ability to deliver growth when the rest of the banking sector is struggling. And while it will not be immune from the pandemic and FY 2021 could be an underwhelming year, it has a long history of bouncing back strongly and generating solid returns for investors. At present I estimate that its shares offer investors a partially franked 4.8% FY 2021 dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final option to consider is Telstra. I believe the telco giant is well positioned to return to growth in the not so distant future. Especially given the return of rational competition in the telco industry, its T22 cost-cutting plans, and its leadership position in the 5G market. In the meantime, I am optimistic that the dividend cuts are over and its free cash flows will be sufficient to sustain its current 16 cents per share dividend. This equates to a fully franked 5.2% yield. Incidentally, I’m not alone with this view. As I wrote here, Goldman Sachs believes Telstra’s current dividend is sustainable.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited, Macquarie Group Limited, and Telstra Limited. 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.