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Why I would buy ANZ and this ASX dividend share right now

Whether or not the Reserve Bank will cut rates to zero on Tuesday is difficult to say. But one thing I feel is almost certain, is that interest rates will not be going higher for some time to come.

In light of this, I think ASX dividend shares will continue to be the best place to invest your money for income.

With that in mind, here are two ASX dividend shares that I would buy today:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The ANZ share price has been out of form in 2020 and is currently trading over 33% lower than its 52-week high. While a decline is not completely unwarranted, I feel the extent of its decline has been overdone. This has left ANZ’s shares trading at around 13x estimated FY 2021 earnings and 0.9x FY 2021 book value. Which I feel is a very attractive level to buy in at.

This is especially the case for income investors, given my expectation that the bank will pay a partially franked dividend of $1.05 per share in FY 2021. If this forecast proves accurate, it will mean that ANZ’s shares provide investors with a very generous 5.5% yield next year.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If you don’t have enough funds to invest across an adequately diverse group of shares, then the Vanguard Australian Shares High Yield ETF could be worth considering. This is because this exchange traded fund gives investors exposure to a group of high yielding ASX dividend shares through a single investment.

These includes the likes of ANZ and the rest of the big four banks, Telstra Corporation Ltd (ASX: TLS), and mining giants such as BHP Group Ltd (ASX: BHP). At present I estimate that its units provide a FY 2021 dividend yield in the region of 4.3%.

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 and has recommended 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.

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