With an average dividend yield of 4.1%, I believe the Australian share market is a far better option for income investors than high interest savings accounts or even term deposits.
Three dividend shares which are on my shopping list are as follows:
Mantra Group Ltd (ASX: MTR)
Thanks to the inbound tourism boom that Australia continues to experience, I expect strong demand for rooms to result in higher occupancy levels and improved average room rates throughout the accommodation industry. This should put Mantra and its numerous brands in a strong position to deliver above-average profit growth for the next few years. At present Mantra's shares provide a trailing fully franked 3.5% dividend.
Premier Investments Limited (ASX: PMV)
The retail industry hasn't been an easy place to operate in the last 12 months, let alone invest. The prospect of Amazon arriving in Australia and general weakness in consumer spending has led to the sell-off of almost all retail shares. Although not as badly hit as many, Premier Investments has not escaped unscathed. Its shares are down just over 15% since this time last year and are now changing hands at 14x trailing earnings. I believe this is great value for a retailer which I feel has strong niche brands which are largely Amazon-proof. Furthermore, it means its shares now provide a trailing fully franked 4% dividend.
Think Childcare Ltd (ASX: TNK)
I think this childcare provider could be a great buy and hold investment option due to its long runway for growth. Think Childcare has a pipeline of newly developed, purpose built childcare centres around Australia that are waiting to be acquired progressively over the next five years from one of its incubators. I believe this growth potential and its trailing fully franked 4.3% dividend make it a very attractive option for income investors.
