Due to the paltry interest rates on offer from savings accounts and term deposits, I think that investors would be better off skipping them and focusing on the many quality dividend shares trading on the Australian share market.
Three which I believe are in the buy zone right now are listed below. Here’s why I like them:
National Storage REIT (ASX: NSR)
National Storage is one of my favourite dividend shares on the local market due to its positive outlook, high distribution yield, strong balance sheet, and defensive qualities. It is one of the largest self-storage operators in the Australia-New Zealand region with a total of 146 centres and a growing pipeline of development and acquisition opportunities. Solid demand for its centres has led to the trust’s board providing distribution guidance of between 9.6 cents and 9.9 cents per unit in FY 2019. This equates to a yield of between 5.5% and 5.7% at present.
Rural Funds Group (ASX: RFF)
Another of my favourite dividend shares on the ASX is this real estate property trust. As its names implies, Rural Funds is focused on agricultural assets. It currently owns a total of 49 rural properties which are spread out across six agricultural sectors and multiple climactic zones. I’m a big fan of the fund because of its long leases, high quality tenants, and its use of rental indexation. I believe this provides a lot of certainty for its future cash flows and puts it in a position to be able to grow its dividend by its target rate of 4% per annum. This year it expects to pay a total distribution of 10.85 cents per unit, which equates to a yield of 4.7%.
Super Retail Group Ltd (ASX: SUL)
One of my favourite options in the retail sector right now is Super Retail. It is the retail group behind popular brands including Rebel, Macpac, and Super Cheap Auto. Although the retail sector is a tough place to operate right now, this hasn’t stopped Super Retail from delivering strong growth. In the first half of FY 2019 the company grew its profits by 8.9% due to solid like for like sales growth. And thanks to its strong start to the second half, I believe the company is well-positioned to deliver similar growth over the full year. So with its shares changing hands at just 11x earnings and offering a trailing fully franked 6.3% yield, I think Super Retail is a great option for both value and income investors.
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- NEW: Free report names top 3 ASX dividend shares to buy for 2019
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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 RURALFUNDS STAPLED. 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