The ASX dividend shares could be back in the buy zone. The August earnings season told me that many Aussie companies can still give investors a handy income stream.
It's not as simple as just buying dividend shares, especially in the current market. I think it's worth considering some companies with both upside potential and downside protection in 2020.
3 ASX dividend shares to buy in a downturn
I think Telstra Corporation Ltd (ASX: TLS) is worth a look. Telstra maintained its 16 cents per share dividend in its August full-year result.
That's good news for shareholders and means management expects to maintain cash flow in the near-term. I think that 3.5% dividend yield gives Telstra shares some downside protection.
However, I also believe there is upside for Telstra. The company is shaping up as a leader in the 5G network space which could be good news for future earnings.
Telstra isn't the only ASX dividend share that I like in 2021. The Super Retail Group Ltd (ASX: SUL) share price is up 2.6% for the year and could be climbing higher.
Super Retail has some strong brands like Supercheap Auto and Rebel Sport which I think could see further growth. The coronavirus pandemic has seen a spike in earnings but the medium-term is still looking good.
More time spent at home could be good news for home exercise sales while tighter economic conditions could see car repairs sales surge.
Super Retail shares are yielding 1.90% and the ASX dividend share could be a good buy for income and capital gains.
If Super Retail is a little too discretionary for your liking, I think Coles Group Ltd (ASX: COL) is worth a look.
The Coles share price is up 14.2% in 2020 with a 3.4% dividend yield. Coles' supermarket earnings should be largely immune to an economic downturn.
That means the ASX dividend share could be a strong portfolio addition in the event of a downturn.
