Great ASX dividend shares give investors a reliable and consistent dividend payout over a long-term period. So if passive income is what you're after, ASX dividend shares should be part of your portfolio.
Current sharemarket volatility, geopolitical uncertainty, and gloomy outlook might cause many investors to take a more cautious approach to buying shares, or perhaps not buy any at all.
But there are a few reasons why I think now is as good a time as any to buy ASX dividend shares.
Here are three of them.
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1. Dividend yields are still attractive
Many ASX companies, such as Origin Energy Ltd (ASX: ORG) and Dexus (ASX: DXS), are currently offering dividend yields of around 5% to 6%, and more often than not, they're also fully franked. That's a great passive income.
Some stable ASX high-yield dividend shares are paying even more. Nine Entertainment Co. Holdings Ltd (ASX: NEC) and Inghams Group Ltd (ASX: ING) yield as high as 9%.
These aren't just any stocks, either; they're all strong companies with a history of paying a regular dividend. And they have good growth projections too.
The opportunities for a great dividend yield are still out there.
2. Several stocks are trading at a discount
The year so far has been incredibly volatile. Geopolitical uncertainty, war in the Middle East, disruptions to global supply chains, rising interest rates, and soaring inflation are all creating panic.
Investors are selling up and flocking to safe-haven assets.
It's pushed Australia's sharemarkets to around a four-month low. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down another 1.56% and down 2.54% for the year to date.
The declines are seen across nearly all sectors, and while on the surface it could look alarming, they are also creating some fantastic entry points for investors to buy into strong ASX dividend stocks at cheap prices.
Take Dexus, for example. The company is a major Australian property investor, developer, and manager with a large and diverse portfolio of rental assets across offices, industrial, and infrastructure sectors that generate consistent, predictable income. The ASX dividend share has a strong history, and it's currently trading 14.22% lower year to date.
3. ASX dividend stocks are a long-term play
Another great reason to buy ASX dividend stocks right now is that they are a long-term play. ASX dividend shares are usually large and stable, which means they're able to weather the storm over the long term.
When you're looking at a long-term investment, it doesn't matter how you time the market; the amount of time you hold the stock is more important.
