3 must-buy dividend shares for income investors

With interest rates at record lows, I believe investors should look for income with investments in AGL Energy Ltd (ASX:AGL) and two other ASX shares.

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This afternoon the Reserve Bank of Australia will announce its latest monetary policy decision. Whilst very few people expect any changes to be made by new governor Philip Lowe at this meeting, it is possible that in the months ahead we may see rates taken even lower than the record low of 1.5%.

For this reason, I believe that investors should look to the market for sources of income instead of term deposits. Three shares which could be great investments are as follows:

AGL Energy Ltd (ASX: AGL)

Australia’s largest retail energy generator and seller is expected to provide investors with a fully franked 4% dividend in FY 2017 according to CommSec. Although this isn’t the biggest yield on the market, I believe changes to its dividend policy make it a great long-term investment option. Starting with its interim dividend this year AGL Energy is targeting a payout ratio of approximately 75% of underlying profit.

G8 Education Ltd (ASX: GEM)

Following the release of mixed half-year results, the shares of childcare operator G8 Education took an almighty plunge. Although they have recovered slightly now, they are still down by 19% in the last three months. In light of this, its shares are expected to provide a fully franked 7.7% dividend this year. With management expecting a big improvement in the company’s performance in the second half, now could be a great time to make an investment.

Mantra Group Ltd (ASX: MTR)

This leading accommodation provider is another company which has seen its share price drop significantly. The rise of online accommodation marketplace Airbnb appears to have some investors concerned about Mantra’s future growth. Positively management has dismissed these concerns and believes instead that the company is positioned for growth thanks to the Australia’s tourism boom. Its shares are expected to provide a fully franked 4.3% dividend in FY 2017.

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*Returns as of January 12th 2022

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

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