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Forget term deposits and buy these top ASX dividend shares

James Mickleboro
business leader making money

With interest rates at rock bottom levels and likely to go even lower in 2020, it is near impossible to generate a sufficient income with term deposits.

But don’t worry because the three ASX dividend shares listed below could be great alternatives to term deposits.

Here’s why I think income investors ought to consider buying them:

Coles Group Ltd (ASX: COL)

Although it doesn’t offer the biggest yield on the market, I still think that Coles would be a great buy and hold option for income investors. This is due to its defensive qualities and solid long-term growth potential thanks to its refreshed strategy. This strategy aims to reduce costs and make its operations more efficient through automation. I believe this bodes well for its earnings and dividend growth over the next decade. At present its shares offer investors an estimated forward fully franked 3.5% dividend yield.

Stockland Corporation Ltd (ASX: SGP)

Another option for income investors to consider is Stockland. It is a property group which owns, manages and develops a diverse range of assets such as retail centres and residential properties. It was a solid performer in FY 2019 and has continued its positive form in the new financial year. As a result, I feel it looks well-placed for modest growth in FY 2020 and estimate that its shares offer a generous forward 5.8% distribution yield. Interestingly, this week Morgan Stanley named it as the property company to own in 2020.

Transurban Group (ASX: TCL)

A final dividend share for income investors to consider is Transurban. This leading toll road operator owns a collection of vital roads across Australia and North America. Given the importance of these roads, increasing traffic, and periodic toll price rises, I believe Transurban is well-placed to grow its distribution over the next decade. In FY 2020 the Transurban board plans to increase its distribution to 62 cents per security. This equates to a forward 4% distribution yield.

The post Forget term deposits and buy these top ASX dividend shares appeared first on Motley Fool Australia.

And here are three more ASX dividend shares that income expert Edward Vesely has just named as buys.

Top 3 Dividend Shares To Buy For 2020

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Transurban Group. 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