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5 ASX dividend shares to buy for income in 2021

A money jar with label indicating ASXdividend shares
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2020 has been a defining year for ASX dividend shares. In a sense, those companies that pay dividends (or at least used to) have had a ‘wheat from the chaff’ kind of year.

We have seen shareholder income from some ASX dividend shares slashed or dried up entirely. Many of these were previously well-known for their dividends, such as Westpac Banking Corp (ASX: WBC) and Ramsay Health Care Limited (ASX: RHC). But some others managed to ride it out, or even grow their dividends.

So here are 5 ASX dividend shares that offer the prospects of dividend income in 2021:

Telstra Corporation Ltd (ASX: TLS)

The ASX’s largest telco, Telstra has long had a reputation for dividend payments, despite its infamous payout slash a few years ago. The company has managed to maintain its 16 cents per share annual dividend in 2020 however, and has indicated it plans on continuing this payout in 2021. If that indeed comes to pass, it means Telstra shares’ trailing dividend yield of roughly 5.25% on current pricing looks set to continue into next year.

Coles Group Ltd (ASX: COL)

Coles has had an interesting year. It was an unexpected beneficiary of the mass-panic hoarding of groceries earlier in the year, and has benefitted from strong sales since. This enabled Coles to increase its 2020 dividends compared to 2019’s payouts. Coles is currently offering a rough trailing yield of 3.2%.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is another ASX dividend share that has held up well this year. The owner of the Bunnings, OfficeWorks and Kmart chains has paid out 2 ordinary dividends (75 and 77 cents per share respectively) as well as a special dividend of 18 cents per share. That gives this industrial conglomerate a rough trailing yield of 3.42% today.

Rural Funds Group (ASX: RFF)

Rural Funds is an agriculture-based real estate investment trust (REIT). It owns a portfolio of farmland, on which foods such as grapes, nuts and cattle are grown or produced. It has also paid out 2 dividend distributions in 2020, which were higher than the 2 payments 2019 saw. That gives Rural Funds’ shares an approximate trialling yield of 3.85% on current prices, although these payments don’t come with franking credits attached. 

Washington H. Soul Pattinson & Co Ltd (ASX: SOL)

‘Soul Patts’ holds the distinguished title of the ASX dividend share with the best record of consecutive dividend increases. Another industrial conglomerate, Soul Patts has grown its dividend every single year since 2000. This includes 2020, which saw the company bump its payout by 9.4% to 60 cents a share. That gives Soul Patts a rough trailing yield of 1.98% on current pricing.

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Returns As of 15th February 2021

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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