Finding top dividend-paying ASX shares is a hard ask these days. We've already seen dozens of 'blue chips' cut, defer or cancel dividend payments in 2020, including Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC) and Sydney Airport Holdings Pty Ltd (ASX: SYD).
I'm sure we'll see a lot more by the end of the year, too.
So with this in mind, here are 3 ASX dividend shares that I think will make excellent choices for income in 2020.
Australia Foundation Investment Co Ltd (ASX: AFI)
AFIC is a listed investment company (LIC) that has been around since the 1920s. Since then, it has developed a reputation for conservative, broad-based investing with a focus on delivering fully franked dividends.
I think AFIC is well positioned to continue this tradition in 2020. Management has rotated away from ASX bank shares in recent months, with only Commonwealth Bank of Australia (ASX: CBA) appearing in the company's top 5 holdings. Replacing them are shares like CSL Limited (ASX: CSL) and BHP Group Ltd (ASX: BHP)
On current prices, AFI shares are offering a trailing dividend yield of 4.16%, or 5.94% grossed-up.
Coles Group Ltd (ASX: COL)
Coles is another ASX blue chip that I expect to deliver strong dividend payments in 2020 and beyond. We all saw the rush on Coles and other supermarkets in the early stages of the coronavirus pandemic.
This ended up leading to a 12% sales bump for Coles in the quarter ending 31 March 2020. Coles has a dividend payout policy of 80–90% of earnings, so these sales should somewhat underpin its dividend payments for the rest of the year.
On current prices, Coles shares are offering a trailing dividend yield of 2.75%, or 3.93% grossed-up.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
This exchange-traded fund (ETF) is designed to maximise exposure to the ASX's best dividend-paying shares. As such, it holds a basket of 62 shares that service this goal.
Much like AFIC, VHY's portfolio has recently adapted to 2020 conditions by transitioning away from the ASX banks into more reliable dividend shares. I think this flexibility is a great asset during these uncertain times, and I like that management has been agile in this respect. Its top holdings now include BHP and Wesfarmers Ltd (ASX: WES).
The trailing dividend yields from ETFs can be a little more unreliable than individual ASX shares, but VHY brings it in at 6.7% for the trailing 12 months. Vanguard estimates VHY's forward yield at 5.6% or 7.7% grossed-up.
