As I mentioned here earlier, it is looking more and more likely that the Reserve Bank will be taking the cash rate down to 0.5% over the next six months or so.
Although borrowers will be celebrating this news, income investors will no doubt be feeling extremely dejected.
If the cash rate drops to this level it could mean the interest rates on term deposits fall below the inflation level, meaning any funds invested in them actually diminishes in real terms.
The good news is that despite the share market trading close to an all-time high, there are still plenty of high-quality dividend options offering very attractive yields.
Three to consider buying next week are as follows:
Lendlease Group (ASX: LLC)
One dividend share to consider buying is Lendlease. The international property and infrastructure company’s long term outlook improved greatly this month when it signed a major project agreement with Google. The ~$20 billion project will see the company develop the tech giant’s landholdings in San Jose, Sunnyvale and Mountain View into mixed-use communities. I expect this to underpin solid earnings and dividend growth in the future. At present I estimate that its shares will offer a fully franked 4.6% dividend yield in FY 2020.
National Storage REIT (ASX: NSR)
National Storage is a self-storage operator that has expanded its footprint materially over the last few years thanks to development projects and its growth through acquisition strategy. Pleasingly, due to the market being highly fragmented, I believe there is still plenty of growth opportunities ahead for National Storage. This could support solid dividend growth over the next decade. I estimate that its shares provide a forward 5.5% distribution yield.
Super Retail Group Ltd (ASX: SUL)
A final dividend share to consider buying is this retail group. Super Retail is the company behind retail chains such as Supercheap Auto, Rebel, BCF and Macpac. It has managed to achieve solid profit growth this year despite tough retail conditions. As a result, I’m optimistic that FY 2020 could be an even stronger year if a housing market rebound and tax cuts lead boost consumer confidence. At present its shares offer a trailing fully franked 5.2% dividend yield.
With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.
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The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.
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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 Super Retail Group Limited. The Motley Fool Australia has recommended National Storage REIT. 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