Why I would snap up these high-yielding dividend shares today

The Telstra Corporation Ltd (ASX:TLS) dividend is one of three which I think income investors should look at snapping up today.

| 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

As interest rates are at record lows and showing no signs of increasing in the near future, I don't believe there is much incentive in keeping cash in high interest savings accounts.

Instead I would suggest investors put those funds to work in the share market. After all, with an average dividend yield of 4.3%, there certainly are a lot of options for investors.

Three dividend shares which I would consider today are as follows:

With the G8 Education Ltd (ASX: GEM) share price down around 12% in the last 30 days, its shares now provide investors with a trailing fully franked 6.6% annual dividend paid quarterly. Although its falling occupancy levels is a concern, with childcare demand expected to rise strongly I'm optimistic that things will improve greatly in FY 2017. In the long-term the company has its eyes firmly on the lucrative China market. If G8 Education is able to make a success of its proposed expansion into China, there certainly would be significant room for its dividend to grow over the next decade.

The Retail Food Group Limited (ASX: RFG) share price has not had a great start to 2017 and finds itself lower by a massive 27%. Although I'm not a big fan of all of its brands, I believe its coffee businesses are what makes it a buy today. The strong performance of its Coffee Retail segment was a key reason Retail Food Group delivered half-year net profit growth of 12.7%. The good news is that the company sees significant room for the businesses to grow internationally, which I believe should result in solid earnings growth over the next few years. This should allow it to continue to grow its dividend, which currently provides a trailing fully franked 5.7% yield.

The Telstra Corporation Ltd (ASX: TLS) share price has been hammered in the last few months, falling a whopping 20% year-to-date. Concerns over TPG Telecom Ltd (ASX: TPM) launching its own mobile network and stealing market share from the telco giant appear to be behind the decline. Although I feel Telstra will inevitably be impacted, I think fellow telcos Optus and Vodafone are likely to suffer the most. All in all, I feel the sell-off may have been a bit of an overreaction. So with Telstra providing a trailing fully franked 7.5% dividend, I think it could be a great option for income investors today.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group 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 Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »