2 ASX blue chip dividend shares with yields over 4% today

With term deposits offering very little in returns, here are 2 ASX dividend shares that offer yields of 4% or greater.

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As my Fool colleague James Mickleboro pointed out this morning, the best you can expect from an Aussie bank term deposit right now is around 0.6% per annum. That kind of annual yield is, from a wealth-building perspective, pretty uninspiring. At that rate, your money is actually going backwards in real terms if you account for the effects of inflation and taxes.

So what's the alternative? Well, there are a number of ASX dividend shares offering yields that far exceed those of cash investments these days.

Here are 2 such ASX blue chip income payers that offer fully franked yields of more than 4% on current prices.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the most diversified ASX shares on the market. It owns a staggering array of quality business. These range from the massive retailers in Bunnings, Target and Officeworks, to smaller brands like Kleenheat Gas, Workwear and CSBP.

The company also still retains an approximate 5% stake in Coles Group Ltd (ASX: COL) (more on Coles later), which it used to own in its entirety before the 2018 spin-off.

So, Wesfarmers is known for its diverse earnings base and sheer size (its current market capitalisation is close to $57 billion). But what of its dividends?

Wesfarmers has paid out 95 cents per share in ordinary dividends in 2020, plus a special dividend of 18 cents per share, all fully franked. That gives Wesfarmers' shares a trailing dividend yield of 3.03%, which grosses-up to 4.33% with full franking, or 4.84% if you include the special dividend as well.

Coles Group Ltd (ASX: COL)

This company probably needs little introduction as the second-largest supermarket/grocer in the country, with a market capitalisation of $23.92 billion on current pricing. However, the Coles Group doesn't just own supermarkets. It also owns bottleshop chains like Liquorland, Vintage Cellars and First Choice liquor, as well as Coles Financial Services and an interest in the Flybuys loyalty program.

Coles has had an interesting year, but one that has resulted in record sales. The company reported a healthy full-year revenue growth rate of 6.9% for FY2020 back in August. This enabled Coles to increase its final dividend for 2020 by 14.6% to 27.5 cents a share. That gives Coles shares a full-year dividend of 57.5 cents per share in 2020, which gives us a trailing yield of 3.21% on current prices. That's 4.59% grossed-up with Coles' full franking credits.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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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