Looking for ASX dividend share ideas to kickstart your portfolio leading into 2020?
With bank term deposit rates failing to generate enough income for many investors here are six dividend-paying shares to help you build your watchlist.
Commonwealth Bank of Australia (ASX: CBA)
CBA is Australia’s largest and most iconic bank. Despite a challenging period for the big banks during the Royal Commission, CBA has remained hugely profitable which has meant the share price has proven very resilient right through the saga. Offering up a juicy fully franked dividend yield of 5.3%, CBA shares are an obvious choice for any blue chip income portfolio. Click here to read more analysis about CBA shares.
Bendigo and Adelaide Bank Limited (ASX: BEN)
Sometimes referred to as Australia’s regional bank, Bendigo bank may prove to be a beneficiary of an increasing number of customers looking to leave the big banks in the fallout from the Royal Commission. The Bendigo bank share price has recently dipped back under $11 which has seen the trailing dividend yield lift to a very appealing 6.4%. The yield rises to nearly 9% once grossed up for franking credits.
QBE Insurance Group Limited (ASX: QBE)
Australia’s largest global insurer has been in the doghouse for the best part of a decade.
However, for QBE’s faithful shareholders there is a growing belief that new management may be finally starting to turn the ship around by cutting unprofitable businesses and generally streamlining operations. The QBE share price has risen about 15% since June 2019 and might be building some positive momentum. With a dividend yield of 4.2%, QBE is worthy of consideration.
BHP Group (ASX: BHP)
I’m not typically a big fan of resource stocks however BHP shares are one of the very few which can claim to consistently produce a profit. Thanks to its greater diversity and scale, BHP shares are a less risky investment than most resource companies which tend to rely upon a single commodity (e.g. iron ore or gold). The BHP share price has fallen more than 10% since August 2019 making BHP more attractive as a long-term proposition. The kicker is a 5.4% trailing dividend yield.
Transurban Group (ASX: TCL)
As the owner and operator of major toll roads, Transurban produces a reliable stream of dividend/distribution income from its portfolio of high-quality assets. Transurban management have provided distribution guidance for this financial year at $0.62 per share. Based on that, Transurban shares trade on a prospective dividend yield of 4.2%.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is a large conglomerate which has owned and operated some of Australia’s largest retail brands, such as Kmart and Target. These days Wesfarmers’ largest business is Bunnings Warehouse, which is Australia’s number-one DIY home improvement business. The Wesfarmers share price has climbed from $35 to above $41 since June 2019, but still maintains a healthy dividend yield of 4.3%.
What’s The Catch?
It’s important to remember that future dividends are not guaranteed. Choosing companies that are likely to have the ability to grow their dividend over time provide the opportunity to benefit from both capital growth (from a rising share price) and dividend income — thus potentially boosting returns. But if you buy the wrong dividend share, there’s no guarantee it turn out to be a worthy investment.
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Disclosure: At the time of publishing, Luke has no financial interest in any companies mentioned.
