3 dividend stocks to boost your income

Credit: GotCredit

The interest rate offered by banks these days is truly terrible and it’s only getting worse with some of the best rates being lowered from 3% to 2.8%.

This makes it really hard to generate any meaningful income from cash in the bank, so I think investing in the share market for income is the best way to go at this point until interest rates are higher again.

Here are three shares I’d choose for income:

Arena REIT No 1 (ASX: ARF)

Arena is a real estate investment trust (REIT) that focuses on investing in properties that are in growing sectors. The main industry it invests in is childcare, but it also invests in healthcare industry buildings.

There is a child boom happening in Australia and that helps Arena implement good rental increases, which boosts returns over the long-term. Plus, the value of the properties should increase over time as land values increase.

Arena is currently trading with a distribution yield of 5.78%.

WAM Capital Limited (ASX: WAM)

WAM Capital is a listed investment company (LIC) that has been one of the best performing LICs over the past five years. It invests in what it calls undervalued growth companies and usually makes a good profit each year.

It pays out a lot of its profit as dividends each year and it currently has a grossed-up dividend yield of 8.71%.

Japara Healthcare Ltd (ASX: JHC)

Japara is one of the largest aged care operators in Australia. It has a good long-term future because Australia’s population is ageing and a lot of those people will end up in an aged care facility, which should be a big boost to Japara’s revenue in the future.

It pays out almost all of its earnings as a dividend each year, which means it has a large dividend yield, which is currently 7.8% grossed-up.

Foolish takeaway

I’d be happy to buy all three shares for income at the current prices, as I think all three shares will grow their earnings and dividends in the long-term.

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Motley Fool contributor Tristan Harrison owns shares of ARENA REIT STAPLED, JAPARA DEF SET, and WAM Capital Limited. 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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