With the cash rate at a record low of 0.25%, it is becoming harder and harder to earn a sufficient income from term deposits and savings accounts.
But don't worry, because there are a large number of ASX shares paying very generous dividends.
Three top dividend shares to consider buying when the market settles are listed below. Here's why I like them:
BHP Group Ltd (ASX: BHP)
Despite iron ore price remaining strong during the global market weakness, investors have been selling off BHP's shares. I think this could prove to be a buying opportunity for income investors, especially with Chinese stimulus likely to support demand for iron ore in the coming months. If prices do remain high for longer, then it should lead to BHP generating high levels of free cash flow again in FY 2020 and FY 2021. Based on this, I estimate that its shares provide a forward fully franked dividend yield of at least 6%.
Telstra Corporation Ltd (ASX: TLS)
Another quality dividend share to consider buying is Telstra. The telco giant's share price has fallen heavily this month despite it confirming that it remains on track to achieve its guidance in FY 2020. And while there is likely to be some impact on its financial performance because of the coronavirus outbreak, I believe its defensive qualities means the impact will be limited and its dividend should be sustainable. Outside this, I think its long term outlook is positive and the company could return to growth from FY 2022. At present its shares offer a fully franked 5.2% yield.
Transurban Group (ASX: TCL)
A final dividend share to consider buying is Transurban. I think the toll road operator is a great long term option for investors due to the quality of its roads, their strong pricing power, and its acquisition and expansion opportunities. Whilst the coronavirus outbreak is likely to reduce the traffic on its roads temporarily, I expect it to return to growth once the crisis passes. In FY 2020 the company intends to pay a distribution of 62 cents per share, which equates to a yield of almost 6.1%.
