The Harvey Norman Holdings Ltd (ASX: HVN) share price has been a top ASX dividend share for some time.
The Aussie retailer's shares surged 32.14% higher in 2019 and have continued that momentum this year.
Since the start of January, the Harvey Norman share price is up more than 6.5% and ahead of the S&P/ASX 200 Index (INDEXASX: XJO) at the time of writing. But the best bit?
Harvey Norman shares are still yielding 7.58% per annum on current prices.
So, is the Aussie retailer the best ASX dividend share on the market right now?
Why Harvey Norman could be the best ASX dividend share
There's plenty of good competition amongst the top ASX dividend shares in 2020. In terms of pure income, Alumina Limited (ASX: AWC) is the highest-yielding with 11.21% p.a.
However, I am a little wary of investing in Aussie resources shares given their cyclicality. It's the same story for BHP Group Ltd (ASX: BHP), which is netting a tidy 4.67% per annum.
The next most obvious category to look at is the Aussie banking sector. The big four banks and Macquarie Group Ltd (ASX: MQG) are always amongst the top ASX dividend shares.
Westpac Banking Corp (ASX: WBC) has the best yield with 6.89% at the time of writing. Macquarie shares recently hit a new record high and still pay 4.21% to shareholders. Macquarie dodged the 2018 Royal Commission bullet and is a real contender for the top stock.
However, Harvey Norman offers a bit of diversification in an ASX portfolio. The ASX 200 is heavily concentrated in the Materials and Financials sector, so not only does Harvey Norman offer a high yield, but it can diversify your portfolio and boost your risk-adjusted returns.
Another plus is that Harvey Norman offers capital gains as well as income as a top ASX dividend share. Harvey Norman shares continue to climb higher and so too do returns to shareholders.
What's not to like about the Aussie retailer?
While the numbers seem to be point to Harvey Norman as a top ASX dividend share, there are a couple of areas for concern.
The Aussie retail sector has been under pressure for quite some time now. Consumer confidence is down and there have been several high-profile restructures or insolvencies in recent times.
There's also question marks around founder and Chairman Gerry Harvey as he continues to battle with activist shareholders.
Foolish takeaway
There's no doubt Harvey Norman shares have been a good investment for a number of years. However, I'd be watching for the group's February results to see if it can maintain its earnings and status as a top ASX dividend share.
