Why I would buy ANZ and these ASX dividend shares in May

Australia and New Zealand Banking Group (ASX:ANZ) dividend is one of three that I would snap up next month…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With the cash rate at a record low and tipped by many to go lower as soon as next month, I think savers would be better off putting their money to work in the share market than leaving it to gather only paltry interest in a savings account.

Especially given the large number of quality dividend shares that offer yields which are vastly superior to anything you'll receive from savings accounts or term deposits.

Three dividend shares I would buy next month are listed below:

Adairs Ltd (ASX: ADH)

Adairs is one of Australia's largest homewares retailers with a total of 166 stores. Despite the housing market downturn the company has continued to perform well and reported a 10.6% increase in sales to $164.4 million and a 9.1% lift in net profit after tax to $14.9 million in the first half of FY 2019. Pleasingly, the company started the second half strongly and looks set to deliver a solid full year result in August. I believe this will allow Adairs to increase its dividend again, making its trailing fully franked 7.8% dividend yield even more attractive.

Australia and New Zealand Banking Group (ASX: ANZ)

My favourite option in the banking sector right now is ANZ. I believe its strong capital position and cost cutting opportunities means the bank's dividend is not only sustainable but could be complemented with capital management initiatives such as share buybacks or special dividends. At present its shares offer a trailing fully franked 5.8% dividend yield. Though, it is worth noting that the bank is due to release its half year result imminently, so it might be prudent to hold out for this release before investing.

Transurban Group (ASX: TCL)

I think this toll road giant is a great option for income investors. Transurban is one of the world's largest toll road operators with a portfolio of roads in Melbourne, Sydney, Brisbane, and North America. Thanks to steadily growing traffic numbers and toll prices, Transurban has been able to grow its distribution at a solid pace over the last decade. I expect this to remain the case for the foreseeable future, potentially making it a great buy and hold option. At present its units offer a distribution yield of 4.2%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Transurban 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.

More on ⏸️ Dividend Shares

A boy hold money and dressed in business suit next to money bags on a desk, indicating a dividends windfall
⏸️ Dividend Shares

The Accent (ASX:AX1) dividend has lifted by 22%

The company will reward shareholders with an increased dividend...

Read more »

a woman sits in the driver's seat of a car with her arm resting on the door with a small smile on her face, looking out of the car.
⏸️ Dividend Shares

Carsales (ASX:CAR) share price records a modest rise on dividend slash

Australia's largest online automotive and marine classifieds business notches a conservative share price rise on its latest report.

Read more »

A young entrepreneur boy catching money at his desk, indicating growth in the ASX share price or dividends
Bank Shares

ASX 200 bank shares to follow suit after CBA dividend hike: expert

Dividend investors rejoice! This expert expects more dividends to come from ASX 200 bank shares...

Read more »

sad looking petroleum worker standing next to oil drill
Share Fallers

AGL (ASX:AGL) dividend slashed. Share price down 3% on Thursday

More headwinds for the energy giant as its dividend is now in the spotlight.

Read more »

A girl looks through a microscope at money.
⏸️ Dividend Shares

The ANZ (ASX:ANZ) share price has only gained 10% in 5 years. But have the dividends paid off?

We do the math to see if it has been worth investing in ANZ shares over the long term...

Read more »

man laying on his couch with bundles of money and extremely ecstatic about high dividend returns
⏸️ Dividend Shares

The NAB (ASX:NAB) share price is flat 5 years on. But have the dividends paid off?

We calculate if it has been worth investing in NAB shares over the long run...

Read more »

two children dressed in business attire with joyous, wide-mouthed expressions count money at a desk covered in cash and sacks of money either side.
⏸️ Dividend Shares

Top-10 ASX dividend share delivers market-thumping share price gains

The Holy Grail for income stocks is to return strong capital gains as well

Read more »

happy woman looking at her laptop with notes of money coming out representing financial success and a rising share price and dividend yield
⏸️ Dividend Shares

Mining shares in the ASX 200 might unearth US$26b worth of dividends

Are shareholders about to dig some dividends?

Read more »