MENU

RBA keeps rates on hold: So buy these dividend shares

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.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!