Although economic data has been improving, current cash rate futures are still pointing to a further cut by the Reserve Bank in 2020.
In light of this, I continue to believe that ASX dividend shares are the best way to beat low interest rates.
But which dividend shares should you buy? Three top ASX dividend shares I would buy are listed below:
BHP Group Ltd (ASX: BHP)
I think this mining giant could be a great option for investors, especially given the trade war between the United States and China appears to have been averted. This could lead to solid demand for commodities such as iron ore, oil, and copper in 2020. If this happens, it could lead to another year of bumper free cash flows in FY 2020. As BHP has a tendency of returning the majority of its free cash flow to shareholders, this bodes well for its dividends next year. I estimate that its shares currently offer a fully franked forward 5.9% dividend yield.
Stockland Corporation Ltd (ASX: SGP)
Stockland is a diversified property company which I think is worth considering. After a solid start to the year, it has announced an estimated distribution for the six months to December 31 of 13.5 cents per security. This puts it on course to deliver on its forecast full year distribution of 27.6 cents per security for FY 2020. Based on this guidance, it currently offers investors a forward 5.8% distribution yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
A final option to consider is the operator of Sydney Kingsford Smith Airport. Thanks to its strong pricing power, growing international tourism, and a potential recovery in domestic tourism, I think Sydney Airport is well-placed for modest income and dividend growth in FY 2020 and beyond. It recently declared a 19.5 cents per share dividend for the second half of the financial year. This was a 2.6% increase on the prior corresponding period and lifted its dividends for the last 12 months to 39 cents per share. This equates to a 4.35% dividend yield.
