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These ASX dividend shares could be strong buys for income investors

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Are you looking for a source of income in this low interest rate environment? Then you might want to consider buying these ASX dividend shares next week.

Here’s why I think they are great options right now:

Accent Group Ltd (ASX: AX1)

The first dividend share that I think income investors ought to consider buying is Accent Group. It is the company behind retail brands The Athlete’s Foot, Platypus, and HYPE DC. It is also the distributor of a number of popular brands such as Vans, Timberland, Dr Martens, and Skechers. While certain areas of the retail sector have struggled during the pandemic, lifestyle footwear hasn’t been one of them.

Accent Group delivered very strong sales and profit growth at the end of FY 2020 and this appears to have carried over into the new financial year. Looking further ahead, I believe the company is well-placed for growth over the coming years thanks to its expansion plans, rapidly growing online business, and strong market position. In FY 2021, I expect the company to pay a 9 cents per share fully franked dividend. Based on the current Accent share price, this will be a 4.9% yield.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share to consider buying is Wesfarmers. As with Accent Group, Wesfarmers has been a positive performer during the pandemic. This is thanks largely to its key Bunnings business. The good news is that with the government providing home improvement stimulus and tax cuts, I believe Bunnings is well-positioned to continue its positive form over the coming years.

In addition to this, tax cuts are likely to be supportive of its other businesses such as Kmart, Target, and Catch. Combined with potential earnings accretive acquisitions, I believe Wesfarmers can grow its earnings and dividend at a solid rate over the 2020s. For now, I expect it to pay a fully franked dividend of ~$1.50 per share in FY 2021. Based on the latest Wesfarmers share price, this equates to an attractive fully franked 3.1% dividend yield.

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Returns As of 6th October 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Accent Group. 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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