Australia Markets close in 1 hr 54 mins

2 top ASX dividend shares with yields over 6%

Sebastian Bowen
dividend chart increasing

In today’s low interest rate environment, yield is something of a sacred commodity. After all, getting a 5–6% return on your cash investments seems like something from a lifetime ago.

These days, even term deposits are struggling to return anything above 1.5%, and things aren’t much better in the bond market.

That leaves ASX dividend shares as one of the only real alternatives. Dividends and stocks are riskier than cash and bonds, but the return you can expect from them makes it worth some serious consideration, in my opinion.

Here are 2 ASX shares that offer yields over 6% today.

Australian and New Zealand Banking Group (ASX: ANZ)

ANZ inflamed its investors a few weeks ago when it announced the level of franking that would come with its dividends would be dropped from 100% to 70%. Whilst this does reduce the shareholders returns from ANZ, the ANZ share price has dropped substantially since then – making this a great buying opportunity in my opinion.

ANZ’s raw dividend remains at $1.60 per share (annualised), meaning ANZ shares are offering a starting yield today of 6.47% – or 8.41% with the partial franking. Thus, I think ANZ is a top buy today for dividend income.

Telstra Corporation Ltd (ASX: TLS)

Many investors would still harbour some healthy hatred of Telstra due to the dividend carnage that this telco was forced to unleash on its investors a few years ago. But the fact remains that today, Telstra is still looking attractive as a dividend stock.

On current prices, Telstra’s annual 16 cents per share dividend translates to a starting yield of 4.51% – or 6.43% including full franking credits. Telstra is also a relatively defensive stock (if you don’t count the ongoing uncertainty from the whole NBN shemozzle), which I think is a great attribute in Telstra’s favour. Thus, I think Telstra is a solid buy for dividend income today as well.

Foolish takeaway

With these 2 ASX shares, you are getting 2 stocks that offer dividend yields exceeding 6% with franking. Whilst there are always uncertainties with ASX dividend shares, these blue-chips have a long history of delivering high yield income, so I think you could certainly do worse in today’s low interest rate world.

The post 2 top ASX dividend shares with yields over 6% appeared first on Motley Fool Australia.

For more fabulous income shares to buy, don't miss our new Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

More reading

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019