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Coles and these ASX dividend shares can help you beat low interest rates

James Mickleboro
Coles share price

One positive for income investors in this low interest rate environment is that the Australian share market continues to be home to a large number of dividend shares offering generous yields.

Three dividend shares that I think would be great options for income investors right now are listed below. Here’s why I would buy them:

Accent Group Ltd (ASX: AX1)

Accent Group is a footwear-focused retail group behind retail chains such as Athlete’s Foot and Platypus. It has been one of only a small number of retailers that appear to have been unaffected by the tough trading conditions being reported in the retail sector. The good news is that with trading conditions tipped to improve over the next few months thanks to tax cuts and an improving housing market, Accent appears well-placed to deliver another solid result in FY 2020. At present its shares provide a trailing fully franked 5.7% dividend yield.

Coles Group Ltd (ASX: COL)

Another top option for income investors could be this supermarket giant. Although its shares have been on fire in recent months, they still provide an attractive dividend yield which has the potential to grow substantially over the next decade. This is due to its solid growth prospects thanks to expansion opportunities and its high level of investment in automation. The latter is expected to cut costs materially and make the company significantly more efficient. Based on its dividend policy of paying out 80% to 90% of its earnings, I estimate that its shares currently provide a FY 2020 fully franked 3.9% dividend yield.

Mirvac Group (ASX: MGR)

Finally, another option for income investors to consider is this diversified property group. Last week Mirvac Group released its FY 2019 results and reported a 4% increase in operating profit to $631 million. This was at the top end of its guidance range. Next year the company expects similarly solid growth, with management forecasting earnings growth in the region of 3% and 4%. Pleasingly, it intends to lift its distribution at an even quicker rate of 5% to 12.2 cents per security. This equates to a forward 3.75% distribution yield.

And don't miss these top dividend picks which were just rated as must buys for FY 2020.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent 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