This afternoon the Reserve Bank of Australia opted to keep rates on hold at the record low of 1.5% for yet another month.
The cash rate has now been stuck at 1.5% since August 2016 and economists are not expecting that to change until November of next year.
While this is great news for borrowers, it certainly isn’t for income investors that live off the interest from savings accounts or term deposits.
The good news is that the Australian share market is home to plenty of dividend shares that can help income investors escape low interest rates.
Three that I think are great options today are listed below:
Dicker Data Ltd (ASX: DDR)
I’m a big fan of companies that have directors with plenty of skin in the game and this computer software and hardware wholesale distributor certainly ticks that box. Founders David Dicker and Fiona Brown have a 37.8% and 33.7% stake, respectively, in the company. But having skin in the game counts for nothing if the company isn’t performing well. Thankfully Dicker Data has been performing exceptionally well this year, which has allowed management to propose an annual fully franked dividend of 18 cents per share paid in quarterly instalments. Based on its current share price, this equates to a 6.1% yield.
Rural Funds Group (ASX: RFF)
I think this real estate investment trust could be a good option for income investors. Rural Funds owns a portfolio of farming assets which gives it exposure to cotton, cattle, poultry, grape, macadamia, and almond production. For many years the company has counted many of Australia’s biggest producers and exporters as tenants. I find this long-term tenure trend and the rental indexation built into its rental contracts very attractive and believe it should allow Rural Funds to grow its earnings and distribution at a consistent rate long into the future. Rural Funds’ shares currently provides a trailing yield of 4.7%.
Westpac Banking Corp (ASX: WBC)
The negative investor sentiment brought about by the Royal Commission has left Westpac’s shares trading within sight of their 52-week low. I think this decline has more than priced in the risks associated with the Commission, making it an opportune time to snap up the bank’s shares. Especially given how there’s a strong chance that the banks will look to improve their profitability through out of cycle rate rises. Westpac’s shares offer a trailing fully franked 6.8% dividend currently.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and RURALFUNDS STAPLED. 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.