With the cash rate at a record low and unlikely to improve for some time, it is becoming increasingly difficult for investors to generate a sufficient income from traditional interest-bearing assets.
Don't worry, because despite the coronavirus crisis, there are still a good number of ASX shares offering generous dividend yields.
Three top dividend shares that I would consider buying in April are listed below:
Coles Group Ltd (ASX: COL)
On Tuesday this supermarket giant's shares crashed 10% lower after Wesfarmers Ltd (ASX: WES) announced that it was selling down its stake. I think this is a buying opportunity for income investors. Especially given how Coles remains one of only a handful of companies that are benefiting from the coronavirus crisis. So much so, I expect Coles to deliver strong earnings and dividend growth in both FY 2020 and FY 2021. Based on this, I estimate that its shares offer a forward fully franked ~4% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
My favourite big four bank to buy right now is the Commonwealth Bank. I think it is the highest quality bank in the country and trading at a very attractive level after a recent pullback. And while the coronavirus outbreak is likely to weigh heavily on its performance in the near term, I believe this is more than priced in by the market. And even after accounting for a probable dividend cut, I still estimate that its shares offer a forward fully franked ~6.3% dividend yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
In the current environment where companies are deferring or cancelling their dividend payments, it certainly pays to have a diverse holding of income shares. But if you don't have the funds to spread around a large number of shares, then the Vanguard Australian Shares High Yield ETF could be a great alternative. It gives investors exposure to a large number of the highest yielding dividend shares the ASX has to offer. This includes mining and banking giants, and the likes of Telstra Corporation Ltd (ASX: TLS) and Wesfarmers. At present I estimate that it provides a forward ~80% franked 5.4% dividend yield.
