If you are looking to build an income focused portfolio, here are 5 shares you might want to consider:
Bapcor Ltd (ASX: BAP)
Bapcor is a leading provider of motor vehicle parts, accessories and servicing with well known brands such as Autobarn, ABS and Midas. Whilst the company's dividend yield of 2.3% might not seem attractive, it has a low payout ratio of 56% and high gross margins of over 40% which gives the business room to grow their dividend if they need to.
Commonwealth Bank of Australia (ASX: CBA)
CBA has a healthy dividend yield of 5.3% and will likely benefit going forward if interest rates rise from current historic lows. A growing Australian population could also boost long term demand for housing (and consequently mortgages and other banking products). Whilst the banks have been subjected to a royal commission, much of the impact of that appears to have been priced in to CBA's current share price.
Wesfarmers Ltd (ASX: WES)
Wesfarmers owns a number of well known businesses including Coles, Kmart, Officeworks, Target, Bunnings, Homebase in the UK and a few industrial businesses. Bunnings in particular proved to be quite a resilient business when Woolworths Group Ltd (ASX: WOW) tried to set up a competitor business. Wesfarmers is currently trading at a dividend yield of 5.1%
Macquarie Group Ltd (ASX: MQG)
Macquarie's funds management business provides annuity style income that is consistent and reliable while its capital markets business tends to yield good results when the overall economy is doing well. It's overseas businesses are a good hedge against the Australian dollar and its management team are well regarded as among the best in the business. Macquarie currently trades at a dividend yield of 4.8%.
Scentre Group (ASX: SCG)
Scentre Group operates the Westfield branded shopping centres in Australia and New Zealand and benefits from high occupancy rates due to this well known brand. Its shopping malls are of good quality and often upgraded which allows it to charge higher rentals to its tenants. Whilst online shopping will affect shopping centre traffic, Scentre Group has been quite resilient and that will likely continue based on how Westfield Corp Ltd (ASX: WFD) has performed in the US where there are higher rates of online shopping. Scentre Group is trading at a dividend yield of 5.2%.
If you looking for more dividend stock ideas, see below for our number 1 dividend pick.
