Well, 2020 has been a rough year for holders of ASX dividend shares.
With S&P/ASX 200 Index (ASX: XJO) companies like Westpac Banking Corp (ASX: WBC), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Ramsay Health Care Limited (ASX: RHC) slashing or ‘deferring’ dividends left, right and centre, the forests of yield in 2020 are a sparse hunting ground indeed.
And with the Reserve Bank of Australia telling us that interest rates might not start climbing from their current record low of 0.25% for some years, it’s arguably never been more important to find solid ASX dividend shares.
So that’s why we’ll be looking at 2 such shares today, which I think income investors can confidently buy for solid dividends in 2020 and beyond.
AGL Energy Limited (ASX: AGL)
AGL is the largest electricity and gas retailer in the country. It also owns a portfolio of generation assets (power plants), so there is significant vertical integration with this company.
I like AGL because it is an extremely defensive business. We all need electricity (and gas, in many cases) all of the time, whether it’s for cooking, heating, cooling or just powering our homes and businesses. This makes a company like AGL, which supplies these modern-world necessities, a great business to own — rain, hail or shine.
The defensiveness extends to AGL’s dividends, in my view. On current prices, AGL offers a trailing dividend yield of 6.51%, which comes partially franked as well.
AGL may not be a get-rich-quick kind of share (best avoided anyway), but I think it’s a solid pick for dividend income in 2020 and beyond.
Transurban Group (ASX: TCL)
Another ASX dividend share to consider today is this toll-road giant. Transurban did get whacked by the coronavirus-induced lockdowns we saw earlier in the year (and which are still ongoing in Victoria).
More people working from home meant fewer cars on the road — and that wasn’t good news for Transurban. But with cars back on the roads (outside Victoria anyway), I think things are on the mend for Transurban shares.
With a virtual monopoly on tolled roads across Sydney and Melbourne, and a large presence in Brisbane as well as North America, I’m very bullish on Transurban’s long-term future. Even if lockdowns do come back across the country, I think this company will still be able to pay decent dividends for the remainder of the year and beyond.
Transurban’s recent final dividend came in at 16 cents per share — a step down from 31 cents per share the company paid for its interim dividend last year. Despite this setback, I think the company will pay another dividend this year and should be (in my opinion) back on track with its old payouts in 2021.
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Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care 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.