With the interest rates on offer with term deposits barely keeping up with inflation, I think income investors ought to look to the share market for a passive income.
After all, the Australian share market has an average dividend yield of ~4%. This is vastly superior to anything you’ll get from a term deposit right now.
But which shares should you buy? Here are three options to consider:
Macquarie Group Ltd (ASX: MQG)
If you’re not keen on the big four banks then I think Macquarie could be a great alternative. I think it is one of the highest quality companies in the country and a great long term option. This is due to the quality and diversity of its operations and its talented management team. I believe these leave it well-positioned for strong earnings and dividend growth over the next decade. At present Macquarie’s shares offer a partially franked trailing dividend yield of approximately 4.5%.
Telstra Corporation Ltd (ASX: TLS)
I think Telstra would be a good option for income investors. Although times have been hard for the telco giant, I believe things are improving now. Especially given easing competitive pressures and the arrival of 5G. Given its leadership position and superior network, I believe Telstra is well-placed to benefit greatly from 5G technology. In addition, another very big positive is that the end of the NBN rollout is now in sight. Combined with its cost cutting, this could mean that a return to earnings growth isn’t that far away for the telco company. Presently, its shares offer a trailing fully franked 4.5% dividend.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
A final dividend option to consider ahead of a term deposit is the Vanguard Australian Shares High Yield ETF. This ETF is focused on Australian shares that offer above-average dividend yields. These are a diverse group of 60 shares which include mining giant BHP Group Ltd (ASX: BHP) and telco company Telstra. At present the ETF offers income investors an estimated forward 5.4% dividend yield.
The post Forget term deposits and buy these ASX dividend shares next week appeared first on Motley Fool Australia.
When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.
In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.
Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.
- Man bets $221,666 on one ASX stock
- Top analysts name their top 3 ASX blue chip shares for 2019
- 3 quality dividend shares to boost your income
- NEW: Free report names top 3 ASX dividend shares to buy for 2019
- 5 Stocks for Potentially Building Wealth After 50
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. 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