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3 top dividend shares for your retirement portfolio

Credit: 401(K) 2012

With interest rates on savings accounts and term deposits at low levels, it certainly isn’t easy for retirees to generate sufficient income to live on in retirement.

The good news is that the Australian share market is home to plenty of shares offering dividend yields that are vastly superior to the interest rates on offer from savings accounts and term deposits.

Three that I think are particularly good options for income investors are listed below. Here’s why I like them:

Dicker Data Ltd (ASX: DDR)

Last month this computer software and hardware wholesale distributor released its earnings and dividend guidance for the year ahead. According to the release, Dicker Data expects to deliver a 6% increase in earnings in FY 2018. This growth would have been stronger had its New Zealand business not been negatively impacted by the loss of its Cisco contract. Despite this small headwind, management plans to lift its dividend by 10% year-on-year to 18 cents per share. This equates to a forward fully franked 6.2% yield.

National Storage REIT (ASX: NSR)

National Storage is the largest self-storage operator in Australia with 127 centres throughout the country. Demand for its facilities has been growing strongly over the last few years, leading to high occupancy levels and solid profit and distribution growth. The good news is that management appears confident that this can continue for the foreseeable future thanks to its strong development pipeline of eleven new developments and a number of new expansions. Its FY 2018 distribution guidance is between 9.6 and 10 cents per share. The middle of the range equates to a yield of 6.3% at the current share price.

WAM Capital Limited (ASX: WAM)

In my opinion WAM Capital is the best listed investment company to invest in on the Australian share market. Thanks to the strong performance of its funds, WAM Capital has been able to raise its dividend for eight years in a row. And judging by its business performance so far this financial year, I suspect the company will make it nine years in a row. After a strong first-half, WAM Capital raised its interim dividend to 7.75 cents per share, meaning its shares provide a trailing fully franked 6.1% dividend at present. This interim dividend goes ex-dividend on April 12, so there’s still time to get in on the action.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended National Storage REIT. 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 Scott Phillips.

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