Insights

Why I would buy Coles (ASX:COL) and this ASX dividend share

Here’s why I think income investors should buy Coles Group Ltd (ASX:COL) and this top ASX dividend share this month…
The post Why I would buy Coles (ASX:COL) and this ASX dividend share appeared first on Motley Fool Australia. –

Coles share price

If you’re struggling to generate a sufficient income by using term deposits, then I would suggest you consider switching to ASX dividend shares.

This is because there are a good number of companies on the Australian share market paying dividends that offer yields which are vastly superior to those on offer with term deposits.

But which ones should you buy? Here are two ASX dividend shares I would buy:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to consider buying is this supermarket operator. I think it is a great share to own during the pandemic due to its defensive qualities and strong market position. It was thanks partly to these that Coles was able to deliver an impressive full year result last month. At a time when most other companies were reporting sharp profit declines, Coles reported strong sales and profit growth. It posted a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020.

The good news is that Coles has started FY 2021 in a positive fashion and appears to be in a position to deliver another solid result next year. I expect this to allow the company to reward its shareholders with another generous dividend in FY 2021. Based on the current Coles share price, I estimate that it offers a forward fully franked 3.2% dividend yield.

National Storage REIT (ASX: NSR)

A second dividend share to consider buying is this self-storage operator. I like National Storage due to its strong market position and positive long term outlook thanks to its growth through acquisition strategy. It was this strategy that helped the company overcome the negative impact of the pandemic and deliver underlying earnings of $67.7 million in FY 2020. This was a 9% increase over the prior corresponding period.

And while the company’s earnings are likely to be flat at best in FY 2021, I’m confident that it will return to growth once the pandemic passes. For now, the company is forecasting earnings of 7.7 cents to 8.3 cents per share this year and a dividend pay out ratio of 90% to 100%. Based on the current National Storage share price, the middle of this range implies a 4.1% distribution yield.

These stocks could rocket in a Post-COVID world (FREE STOCK REPORT)

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 post Why I would buy Coles (ASX:COL) and this ASX dividend share appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!