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Why I would buy Wesfarmers and these ASX dividend shares

If you’re looking to add a few dividend shares to your portfolio, then I think the ones listed below would be worth considering.

Here’s why I think all three would be top options for income investors right now:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

I think Sydney Airport is a dividend share to buy if you can afford to be patient. Times are hard for the airport operator right now, but things will improve once border restrictions lift and domestic travel resumes. Especially given reports of pent up demand for travel in Australia after months of lockdowns and restrictions. I believe this will be enough for the company to pay a 29 cents per share distribution in FY 2021. This represents a forward 4.7% distribution yield based on its last close price.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another dividend share to consider buying is the Vanguard Australian Shares High Yield ETF. I think this exchange traded fund is a great option for investors that don’t have enough funds to build a truly diverse portfolio. This is because the fund provides investors with exposure to many of the highest yielding shares on the ASX through just a single investment. This includes the banks, telcos, and mining giants. At present I estimate that its units offer a forward dividend yield of at least 5%.

Wesfarmers Ltd (ASX: WES)

A final dividend share I think would be worth buying is Wesfarmers. I like the conglomerate due to the quality and diversity of its portfolio and management’s long track record of making earnings accretive acquisitions. Overall, I’m confident that Wesfarmers is well-positioned to deliver robust earnings and dividend growth over the next decade. This could lead to solid total returns for investors over the period. For now, I estimate that Wesfarmers’ shares offer investors a forward fully franked ~3.6% dividend yield.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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.

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