3 dividend stocks I’d buy today

The stock market turned into a sea of red yesterday, which hurt everyone’s portfolios. But, it also presented a good opportunity for those investors who have cash to invest. For dividend-seekers, a bonus is that reducing share prices means higher starting dividend yields.

If I were looking to buy dividend stocks today, I’d consider these three:

WAM Capital Limited (ASX: WAM)

WAM Capital is one of the largest listed investment companies (LICs) in Australia. It has outperformed the market over the long-term and pays out a lot of its profit as a dividend.

I think WAM Capital could be a good buy today because it actually has a lot of cash compared to most other LICs. At the end of December 2017, 21.3% of its portfolio was cash. This means two things, that the crash wouldn’t have affected WAM Capital’s portfolio as badly as expected and that it could have used the cash to buy beaten-down opportunities.

WAM Capital is currently trading with a grossed-up dividend yield of 8.9%.

Rural Funds Group (ASX: RFF)

Rural Funds is the only ASX-listed real estate investment trust (REIT) that is purely an agricultural property trust.

I think it’s the best REIT because its farmland assets are very useful with the human population growing and this will require more food, which should drive land values higher.

I like that Rural Funds management have a long-term expectation for the distribution to increase by 4% per year.

Rural Funds is currently trading with a distribution yield of 4.77%.

Sydney Airport Holdings Ltd (ASX: SYD)

Sydney Airport Holdings operates the key Sydney Airport, which acts as the gateway into Australia for a lot of international passengers. That’s why the number of passengers is increasing at a good rate, which is boosting earnings for the company and that’s growing the bottom line by double digits each year.

The company is very generous with its dividend and is currently trading with a dividend yield of 5.29%.

Foolish takeaway

All three shares could be good dividend options, at the current prices I’d probably be inclined to go for WAM Capital because the other two may suffer further as interest rates go up.

I also think this top dividend stock is well worth a look for income.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and WAM Capital Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Sydney Airport Holdings 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.

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