ASX dividend shares are a minefield these days. The players and the game have massively shifted since the glory days of 2019. Now, it seems like an ASX share is deemed a successful dividend payer if it trumps up any cash whatsoever in 2020. But when it comes to choosing income shares, I’m adopting a long-term outlook.
Remember, the year we’re all going through has been truly unprecedented, and I’m not going to punish or overlook a company just because it’s had some issues fronting up cash in a year of a global pandemic. So here are 3 ASX dividend shares I would consider today for both their current and future dividend prospects.
3 ASX dividend shares to buy today
CSL Limited (ASX: CSL)
CSL is not normally classed as a strong dividend share, with most ASX investors preoccupied with its eye-watering growth over the past decade. But a dividend share CSL is and a top one at that in my view. The company’s current dividend yield doesn’t look too impressive at 1% today. But when you consider that CSL has managed to double its dividend over the past 5 years, the picture starts looking a lot clearer (and more beautiful). If this rate of dividend payouts continues at anywhere near this pace, you’ll be reaping substantial income from a CSL investment today in just a few years.
Commonwealth Bank of Australia (ASX: CBA)
I’ve gone on the record over my reluctance to consider CBA as a dividend share in the next few years. Even so, I’ve been impressed with the biggest ASX bank’s ability to keep the dividends flowing this year, especially when you consider rivals like Westpac Banking Corp (ASX: WBC) have practically had to turn off the dividend tap. As such, I think CBA is the pick of the bunch right now when it comes to ASX financials.
Yes, CommBank has only paid $2.98 in dividends this year so far. But that still gives CBA shares a yield of 4.57% on current prices. And if CBA ever got back to a position where it was able to pay $4.31 in dividends again (2019’s payouts), the shares today would give you a yield of 6.61%. Now just to be clear, I don’t think this will happen for a number of years. But it’s still a possibility to consider if you have a long investment horizon.
Ramsay Health Care Limited (ASX: RHC)
Ramsay sadly had to end a 20-year streak of annual dividend increases this year when it announced there will be no final dividend for ordinary shareholders in 2020. Such are the realities of this pandemic. Even so, Ramsay made a hard but necessary choice, and I think the company is well placed to resume its dividend trajectory in FY21.
This company is the largest provider of private hospital care in the country – an evergreen and growing market. This company has had a stellar history of growth over the past few decades, and I think is well-poised to continue this in light of our ageing population. As such, I think Ramsay is another top dividend share to buy for future income today.
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Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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.
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