Dividends… It's been a rough year. ASX dividend shares have seen one of the biggest decouplings in ASX share market history in 2020 so far. If you told a dividend investor back in 2018 that 2020 would see ASX bank dividends practically dry up, Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD) slash their payouts and Ramsay Health Care Limited (ASX: RHC) break its 20-year streak of dividend raises, you probably would have been laughed out of the room.
Yet that is the reality all dividend income investors now face in this strange and turbulent year.
So here are 2 ASX dividend shares that I think ASX investors can comfortably turn to instead.
ASX dividend share 1) Rural Funds Group (ASX: RFF)
Rural Funds Group is an agriculturally-focused real estate investment trust (REIT). It owns productive land that is used to grow all manner of crops, from macadamias to wine grapes and beef cattle. Rural Funds rents out this land to various clients and in turn, receives rental income.
These rental agreements are useful to Rural Funds, as most include automatic inflation-linked annual increases. That's precisely why I like this company an income investment. We all need to eat and a coronavirus pandemic isn't getting in the way of that fact. Thus, in a year where ASX dividend shares have been slashing their payouts, Rural Funds has been able to grow its distribution by 4%. On current prices, this gives Rural Funds an unfranked trailing yield of 3.77%. Not bad in my view.
2) Coles Group Ltd (ASX: COL)
Coles is another top income share to consider today. Its defensive supermarkets and bottleshop businesses have proved especially useful to investors in 2020 as panic buying earlier in the year helped insulate Coles from rising coronavirus-related costs.
Similarly to Rural Funds, Coles is inherently useful as a dividend share because we all need to buy food and other household essentials regardless of what is happening in the economy. And it's highly likely that a large chunk of Australians will continue to use Coles to that end. Speaking of dividends, Coles was able to increase its dividend by a hefty 14.6% in its FY2020 earnings report that was released last month. That gives Coles shares a trailing yield of 3.24%, or 4.63% grossed-up with the company's full franking credits.
Foolish takeaway
I think both Coles and Rural Funds are top ASX shares to consider in 2020 for ASX dividend income. They don't offer any kind of eye-dropping yields. But then again, many of the company's that used to offer 5% or 6% dividends are offering nothing today. I think in the search for income in 2020, beggars can't exactly be choosers!
