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2 safe and strong ASX dividend shares to buy during the COVID-19 crisis

With the coronavirus second wave putting pressure on Australia’s economic recovery, a number of companies may be forced to hold back on dividend payments in the short term

As a result, if you’re looking for dividend payments in the near term, then you might want to take a look at the safe and strong ASX dividend shares listed below.

Here’s why I would buy them for income:

Coles Group Ltd (ASX: COL)

The first safe and strong dividend share to consider buying is Coles. I think the supermarket giant is one of the best options for income investors due to its invaluable defensive qualities. These have been on display for all to see during 2020. At a time when the pandemic is causing many companies to defer or cancel dividends, Coles looks well-positioned to continue growing its dividend.

Beyond the pandemic I believe this positive form can continue thanks to its solid growth prospects, expansion opportunities, and its focus on automation. Coles’ current dividend policy aims to pay out between 80% and 90% of its earnings to shareholders. Based on this and the current Coles share price, I estimate that it currently offers investors a fully franked ~3.3% FY 2021 dividend.

Telstra Corporation Ltd (ASX: TLS)

Another safe and strong ASX dividend share to consider buying is Telstra. As with Coles, I think its defensive qualities are one of the main reasons to invest in its shares. These have also been on display during the pandemic, with Telstra able to reaffirm its guidance for FY 2020. Another reason to invest is its T22 strategy. This strategy is cutting costs materially and making Telstra a simpler and more efficient business. Combined with the easing NBN headwind, I believe a return to growth could be on the horizon in the coming years.

Until then, I’m confident Telstra’s 16 cents per share dividend is sustainable from its current free cash flows. Based on the current Telstra share price, this equates to a fully franked 4.7% yield. Incidentally, we won’t have long to wait to see if Telstra pays a 16 cents per share dividend in FY 2020. It is due to release its results on Thursday morning.

These 3 stocks could be the next big movers in 2020

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.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

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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