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Why I’d buy Wesfarmers and 1 other quality ASX dividend right now

asx dividend shares

Looking for quality ASX dividend shares to add to your share portfolio? Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS) are both in my buy zone right now. Here’s why.

Wesfarmers

I like Wesfarmers as an ASX dividend share because it is a highly diversified company. The group operations in retail segments including general merchandise and office supplies. In addition, Wesfarmers also has investments in industrial segments such as energy and industrial.

The group recently released its full year FY 2020 results, reporting a very solid 10.5% revenue growth from continuing operations to $30.85 billion. Wesfarmers recorded relatively high sales growth in both its Bunnings and Officeworks divisions. This was due to increased demand for products during the coronavirus pandemic. Items that are linked to working and learning at home such as laptops and PCs, as well as goods used for home projects, were in particularly high demand since March. Despite highly volatile COVID-19 trading conditions, with the temporary closure of some of its stores, the Kmart retail chain still managed to deliver a strong result.

Overall online sales growth for Wesfarmers during FY 2020 was impressive at 60%. Not only has the online channel proven to be highly popular during the pandemic, the growing trend of online shopping has accelerated significantly during the lockdown period.

Overall revenue growth may slow down a bit during FY 2021 for Wesfarmers. However I believe that the long-term growth prospects of Wesfarmers remain reasonably promising.

Wesfarmers currently pays an attractive 3.19% fully franked forward annual dividend yield.

Telstra

Another quality ASX dividend share that I recommend right now is Telstra. Telstra’s total income for FY 2020 decreased by 5.9 per cent to $26.2 billion. Meanwhile, NPAT for the telco provider decreased 14.4 per cent to $1.8 billion.

On the surface, this top-line result may look disappointing. However, when considered in context of Telstra’s transition into a leaner and slightly smaller telco provider under its T22 strategy, I believe this is a very solid result. Telstra’s T22 strategy is helping the company evolve into a more efficient telco outfit that can more effectively compete in the National Broadband Network (NBN) environment over the next decade.

Telstra continues to be the market leader in the race to rollout nationwide 5G services. At the end of June, the telco provider’s 5G network reached one third of the Australia’s population.

Telstra currently pay a handy 3.45% fully franked forward annual dividend yield. Grossed up that amounts to a return of 4.9%.

Foolish Takeaway

Both Wesfarmers and Telstra are in my view, top notch ASX dividend shares that are well-placed to continue to pay strong dividends over the next few years.

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Motley Fool contributor Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of 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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