3 top dividend shares for your retirement portfolio

Credit: GotCredit

According to the latest Westpac Banking Corp (ASX: WBC) weekly economic report, its economist expects the Reserve Bank of Australia to keep rates on hold at the record low of 1.5% until at least December 2019.

This is not great news for those that use the interest on savings accounts or term deposits as a source of income.

But never fear, the Australian share market has plenty of quality options for income investors.

Three that I think would be great for retirees are listed below:

National Storage REIT (ASX: NSR)

I think that this storage giant could be a great option for retirees. Demand for its storage facilities has been on the rise thanks partly to baby boomers downsizing and population growth. This has allowed management to embark on an expansion plan that includes 11 new developments and several redevelopments of existing sites. I expect this expansion plan to put the company in a position to continue growing its earnings and distribution at a steady rate for many years to come. This year the company intends to pay a distribution of approximately 9.8 cents, equating to a yield of just under 6.2%.

Rural Funds Group (ASX: RFF)

Another good option for retirees could be this real estate investment trust. Rural Funds owns a diverse portfolio of farming assets which include exposure to cotton, cattle, poultry, grape, macadamia, and almond production. Many of these properties are rented out to some of Australia’s biggest producers and exporters which I believe will remain tenants for decades. This long-term tenure trend and the rental indexation built into its rental contracts should allow Rural Funds to grow its earnings at a consistent rate long into the future. I expect this to be the same for its distribution, which currently provides a trailing yield of 4.7%.

WAM Capital Limited (ASX: WAM)

I think that this listed investment company is one of the best dividend options on the Australian share market. Earlier this year the solid performance of its funds allowed management to increase its interim dividend. This means the company is now on course to lift its annual dividend for the ninth year in a row. If its funds continue to perform well in FY 2019, I believe there’s a good chance that it will make it a decade of dividend increases next year. WAM Capital’s shares currently offer a trailing fully franked 6.4% dividend.

Bonus share.

This dividend share could also be worth a look. It has grown its interim dividend by 27% this year and I expect more of the same in the second half and in FY 2019.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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