Fed up of dividend cancellations? Buy these safe ASX dividend shares

Insurance Australia Group Ltd (ASX:IAG) became the latest company to cancel its final dividend. Don't worry, you can buy these ASX dividend shares…

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Earlier today Insurance Australia Group Ltd (ASX: IAG) became the latest company to cancel its final dividend because of the tough trading conditions it is facing.

I suspect this could become a common occurrence during earnings season in August.

In light of this, if you're looking for dividends in the immediate term, you may want to consider buying the dividend shares listed below.

Due to the strength of their business models, I believe these companies are well-positioned to continue paying their dividends as normal during the pandemic.

They are as follows:

Coles Group Ltd (ASX: COL)

This supermarket giant is arguably the safest dividend share to buy. It is one of only a handful of blue chip shares which has accelerated its growth during the pandemic. While not all of its sales growth is likely to flow through to the bottom line, I still expect Coles to report strong earnings and dividend growth next month. Looking ahead, I feel confident that its growth can continue thanks to its defensive earnings, refreshed strategy, and strong market position. Based on the current Coles share price, I estimate that its shares offer a fully franked 3.5% FY 2021 dividend.

Telstra Corporation Ltd (ASX: TLS)

Another safe option for investors to consider buying is Telstra. While it hasn't been a successful investment for income investors over the last five years, I'm optimistic that its dividend cuts have now bottomed. This is because even when accounting for the end of the NBN compensation, Telstra's forecast free cash flow looks sufficient to maintain its 16 cents per share dividend. Furthermore, once the NBN headwind is gone, I believe the new and improved Telstra operating model will be positioned for growth once again. As a result, I think now would be an opportune time to make a patient investment in its shares. Based on the current Telstra share price, it offers investors a fully franked 4.8% dividend yield.

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. 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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