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3 top ASX dividend shares to buy for FY21

Happy new financial year!

Yes, it’s 1 July today and officially the start of the 2021 financial year. Apart from being able to lodge your tax return, a new financial year presents a great opportunity to take a decent look over your investment portfolio. It’s the perfect time to celebrate your gains, rue your losses and look towards your next purchase of ASX shares .

So, on that note, let’s consider some solid ASX dividend shares. Specifically, I’m looking at those shares that I think will prove fruitful for income investors in the year ahead and beyond.

1) Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the largest companies on the ASX. It’s also a retailing giant – owning the Bunnings Warehouse chain of hardware stores as well as Kmart, Officeworks and Target. It also retains a ~5% stake in Coles Group Ltd (ASX: COL). Wesfarmers first listed on the ASX more than 30 years ago and, in my opinion, has proven itself time and again as a savvy allocator of capital. This was highlighted by the company’s acquisition of lithium producer Kidman Resources last year. Wesfarmers is also a formidable dividend payer. On current prices, its shares offer a trailing dividend yield of 3.4%, or 4.86% grossed-up with full franking.

2) Rural Funds Group (ASX: RFF)

Rural Funds has had its fair share of controversy in recent times. Last year, this agricultural REIT (real estate investment trust) was accused of cooking its books by a prominent short-seller. Rural Funds has since been completely exonerated by the courts, however, and I think it remains a top option for income investors to consider. This REIT leases agricultural land to farms and agri-businesses. Its portfolio includes macadamia, cotton, wine and beef-producing land, which all have the potential to return relatively safe and reliable rental cash flows back to Rural Funds. On current prices, Rural Funds shares are offering a 4.2% dividend yield. The company aims to increase this yield by 4% annually.

3) AGL Energy Limited (ASX: AGL)

AGL is Australia’s largest supplier of energy like electricity and gas. This isn’t the sort of company that will make you rich overnight but, in my opinion, AGL does offer a defensive, inelastic earnings base and a strong and robust dividend. Despite this, AGL has yet to regain the highs of above $21 per share we saw back in February. At today’s price of $17.18 per share (at the time of writing), AGL is offering a trailing dividend yield of 6.46%, which grosses-up to more than 8.5% with the company’s 80% franking.

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 Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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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