Later today the Reserve Bank of Australia is largely expected to make an emergency cut to the cash rate.
This will bring the cash rate down to a record low of 0.25%.
It will also put pressure on the net margins of Australia and New Zealand Banking Group (ASX: ANZ) and the rest of the big four, which is likely to lead to the banks cutting the interest rates offered with term deposits and savings accounts.
The good news is that the recent market meltdown means there are a good number of shares on the ASX offering generous dividend yields.
Three top dividend shares I would buy when the volatility eases are listed below:
BHP Group Ltd (ASX: BHP)
If you're not averse to investing in the resources sector, then I think BHP would be a great option. Due to a sharp pullback in its share price this month, the mining giant's shares offer a monster dividend yield which I believe is sustainable thanks to high iron ore prices. I expect these to offset the falling oil prices and lead to strong free cash flow generation in 2020 and 2021. At present I estimate its shares offer a fully franked forward 7% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Due to its defensive qualities, attractive valuation, and generous yield, I think this telco giant would be well worth considering. Especially given its improving outlook thanks to the T22 strategy, cost cutting, the return of rational competition, and the arrival of 5G. Another positive is the status of the NBN rollout. With peak pain from the rollout now in sight, its negative impact on Telstra's earnings will soon start to ease. This could mean a return to growth isn't too far away. In the meantime, I believe its 16 cents per share dividend is sustainable from its current cash flows. This equates to a fully franked dividend yield of 5%.
Wesfarmers Ltd (ASX: WES)
Another option for income investors to consider is Wesfarmers. I think the conglomerate would be a good option due to the quality and diversity of its portfolio of businesses. These businesses include hardware giant Bunnings, Officeworks, Target, Kmart, lithium miner Kidman Resources, its stake in Coles Group Ltd (ASX: COL), and the growing online retailer Catch. Combined, I believe they leave Wesfarmers well-positioned to deliver solid growth over the next decade. For now, I estimate that Wesfarmers' shares offer investors a forward fully franked 4.3% dividend yield.
