With an average dividend yield of approximately 4%, the Australian share market is one of the most generous in the world.
But with so many dividend shares to choose from it can be hard to decide which ones to buy.
To help narrow things down for you, I've picked out three dividend shares that I would buy today:
Australia and New Zealand Banking Group (ASX: ANZ)
I think that ANZ Bank would be a great option for investors that don't already have meaningful exposure to the banking sector. Negative investor sentiment which has been brought about largely by the Royal Commission has led to its shares trading on lower than normal multiples. I believe there's a good chance that once the inquiry has concluded and the final report is released, its shares could rerate higher as sentiment improves. So with its shares currently offering a trailing fully franked 6.2% yield, now could be a good time to snap them up.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused real estate property trust which owns a variety of farm types including almonds, macadamias, cattle, poultry, and vineyards. As well as enjoying long term tenancy agreements, the trust benefits from having rental increases locked in. I believe this puts the trust in a good position to continue increasing its distribution for many years to come. This year the Rural Funds board intends to lift its distribution to 10.43 cents per unit, meaning its units currently offer a forward 4.7% yield.
Sydney Airport Holdings Ltd (ASX: SYD)
The operator of Australia's biggest and busiest airport is another share that I think income investors ought to consider. Thanks to the inbound and outbound tourism boom that Australia continues to experience, I believe Sydney Airport is well-positioned to grow its bottom line and dividend at a solid rate over the coming years. Sydney Airport is expected to increase its dividend to 37.5 cents per stapled security this year, which equates to a yield of 5.3% based on its current share price.
