Unfortunately for savers and income investors, interest rates look set to stay at these ultra-low levels for some time to come.
The good news is that there are plenty of ASX dividend shares which will help you overcome these low rates.
But which ones should you buy? Two top ASX dividend shares I would buy today are listed below. Here's why I like them:
BHP Group Ltd (ASX: BHP)
If you don't mind investing in the resources sector, then I think this mining giant would be a great dividend share to buy. I'm a big fan of the Big Australian and believe it is well-positioned to generate strong free cash flows in FY 2020 and FY 2021. This is thanks to its low cost operations and favourable commodity prices. The latter is particularly the case for iron ore, which is currently trading above ~US$110 a tonne. As a comparison, BHP's full year cost guidance is just US$13-14 per tonne at its Western Australia Iron Ore operation.
Looking ahead, I think the future is very positive as well. This is due to BHP having a number of growth opportunities which could create a lot of value for shareholders down the line. Based on the current BHP share price, I estimate that its shares offer investors a forward fully franked ~5% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
Investors that don't have exposure to the banking sector might want to consider an investment in Commonwealth Bank. The shares of Australia's largest bank are down 20% from their high and are trading at an attractive level for patient investors. And while times are certainly hard right now, I'm optimistic the worst is now behind the bank and the coronavirus provisions it has made are more than sufficient.
Furthermore, while I still expect a dividend cut in FY 2021, I don't believe the cut will be as bad as some expect. I continue to forecast a fully franked dividend in the region of ~$3.70 per share next year. This would be a generous 5.1% dividend yield based on the latest Commonwealth Bank share price.
