This year the pandemic has led to a large number of dividend cuts, suspensions, and cancellations.
While this is disappointing, I believe there are plenty of opportunities for income investors that can afford to be patient.
Two ASX dividend shares that I believe would be great buy and hold options are listed below:
Commonwealth Bank of Australia (ASX: CBA)
The first ASX dividend share to consider buying is Commonwealth Bank. Although they have rebounded strongly from their lows, the shares of Australia's largest bank are still down materially from their 52-week high. This has been driven by concerns over the future economic damage caused by the pandemic.
While the pandemic will certainly have an impact on the economy and bad debts, I'm optimistic that stimulus and a swifter than expected reopening could mean the damage is not as great as first feared. As a result, I feel the worst could be behind Commonwealth Bank now. And although I suspect a dividend cut to ~$3.70 per share is coming next year, I'm increasingly confident this is the bottom of the cycle. This dividend equates to a fully franked 5.8% FY 2021 yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Another ASX dividend share to consider buying with a long term view is Sydney Airport. The airport operator's shares have been hit hard during the pandemic for obvious reasons. However, with domestic tourism expected to start its recovery in the coming months and international tourism to follow in 2021, I don't think it will be long until a growing number of travellers are passing through its terminals again.
It will take time before passenger numbers return to normal levels. However, I'm optimistic that things will be close to normal by the end of 2022. I expect it to be a similar case for its dividends over the next couple of years. I wouldn't expect one to be paid this year, but in FY 2021 I estimate a 29 cents per share dividend and in FY 2022 I feel a 37 cents per share dividend could be possible. This represents yields of 4.9% and 6.25%, respectively.
