ASX dividend shares like Telstra Corporation Ltd (ASX: TLS) are a valuable asset these days. Even though the Reserve Bank of Australia (RBA) left interest rates on hold this week, we still have rates at record lows.
That means the value of holding cash in the short-to-medium term is negligible and could actually be detrimental to your wealth if you consider the effects of inflation.
That's why I think ASX shares like those of Rural Funds Group (ASX: RFF), Commonwealth Bank of Australia (ASX: CBA) and Telstra are the best place to put your hard-earned dollars to work if you have a yearning for dividend yield.
Rural Funds shares
Rural Funds is an agriculture-based real estate investment trust (REIT) which owns tranches of Aussie farmland. Productive land is usually a great investment, and so I think Rural Funds is a great business to have some capital go towards.
It currently leases out farmland for several different crops, including macadamias, almonds, cotton, and vineyards. Rural Funds is currently offering a trailing dividend yield of 4.09%, which it aims to increase by 4% annually.
CommBank shares
CommBank isn't the first ASX dividend share that comes to mind for strong income in 2020. All 3 of the other big 4 ASX banks have delivered substantial dividend cuts in 2020 – or have 'deferred' dividend payments altogether. We haven't yet yeard from CBA on what to expect from its final dividend this year, but it's almost certain not to come in anywhere near 2019's level.
Even so, I think this ASX bank is the best of the banking bunch for future dividend potential. It's unquestionably our strangest bank and will be first in line to benefit from a recovering Australian economy. There might not be much in the way of dividends this year, but I'm far more bullish on 2021 and beyond.
Telstra shares
Telstra is another great dividend share to consider today. This telco giant is the market leader in providing both fixed-line internet services, mobile phones and mobile networks. It's also set (in my opinion) to become the market leader in the new 5G technology that is set to roll out soon. Internet services are regarded as a 'need' rather than a 'want' these days – especially with the 'work from home' trend we have seen so far in 2020. As such, I view the telco space as very defensive.
The company also has a strong dividend of 16 cents per share that it looks to continue to fund this year. On current prices, that would give Telstra shares a trailing yield of 4.91% – or 7.01% grossed-up with full franking credits.
