Dividends are one of my favourite things about ASX shares – who doesn't love free money, right? As much as I love those cheques rolling in, it remains important to think of dividend-paying companies for what they can give us, both today and tomorrow. The ASX has been reaching new heights and we haven't had a recession in Australia in almost 30 years.
Here are three dividend stocks I would buy today, because I'm confident of the cash they can pay tomorrow.
Woolworths Group Ltd (ASX: WOW)
Woolworths is a fantastic company for many reasons – including its famous brand (the 'Fresh Food People'), its 'Woolworths Rewards' loyalty program and its diversity. Apart from owning almost 1,000 supermarkets across the country, Woolworths also runs the Big W discount store chain and the Dan Murphy's and BWS bottle shop network. I also think that its Lion King 'Ooshies' store promotions will do well against arch-rival Coles Group Ltd (ASX: COL) with its successful 'Little Shop' series. Woolworths also has plans to spin-off its bottle shops and pubs businesses into a separate company, which might also become a solid dividend payer in its own right. Woolworths is currently yielding a grossed-up dividend of 3.89%.
BHP Group Ltd (ASX: BHP)
BHP is our biggest ASX miner and has been showering investors with cash over the past year – mostly due to the record prices of iron ore we have been seeing recently. Regardless of this, I like BHP because of its diverse earnings base. Unlike Rio Tinto Ltd (ASX: RIO), BHP gets its earnings from four 'pillar' commodities – iron, coal, oil, and copper. Even if one of these commodities is under-performing, it's likely another will be taking up the slack. BHP has an extremely low production cost-base, meaning that any windfalls in commodity prices should happily find a way into shareholders pockets. BHP is currently paying a 5.53% grossed-up dividend yield.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of our biggest and most diversified blue-chips on the ASX, with the company owning Bunnings, Kmart, Officeworks, a 15% stake in Coles as well as more than a dozen other business interests from mines to clothing lines. This means the company has a hand in our wallet when we buy a huge range of household (and office) goods and ensures a resilient and growing earnings base for shareholders. Wesfarmers' latest dividend would yield 5.82% on current prices.
Foolish takeaway
All of these ASX businesses would be a great place to park your money over the next few years in my opinion. All pay a decent yield and all show resilient characteristics that would be handy during tough economic times. I like Wesfarmers the most on current prices, but I'll be keeping an eye on the others as well over the next few months.
