Why I would buy these top dividend shares instead of term deposits

As I mentioned earlier, the latest Westpac Banking Corp (ASX: WBC) Weekly economic report has suggested that the Reserve Bank of Australia will not be following in the footsteps of its U.S. counterpart any time soon.

In fact, the bank’s economics team have not forecast a rate hike in Australia until sometime after March 2020.

So with the RBA’s first rate hike potentially two years away, it could be years until rates get to normal levels.

Whilst this is great news for borrowers, it certainly isn’t for savers or income investors.

Thankfully the Australian share market is here to save the day with its plethora of dividend shares offering generous yields.

Two that I think would be great options today are listed below:

Dicker Data Ltd (ASX: DDR)

I think that this computer software and hardware wholesale distributor is a great option for investors looking for a regular source of income. Not only does the company offer a generous fully franked annual yield of 6.1% based on its plan to pay a dividend of 18 cents per share this year, but it pays this out in quarterly instalments. Furthermore, with its business continuing to grow at a solid rate, I believe it is well-positioned to increase this dividend in FY 2019 and beyond.

Super Retail Group Ltd (ASX: SUL)

Super Retail is the retail conglomerate behind popular brands including Rebel, Macpac, Supercheap Auto, and BCF. Its shares currently provide investors with a trailing fully franked 5.4% dividend, making it a great alternative to term deposits and savings accounts. Especially given its undemanding valuation of just over 12x estimated full-year earnings. I have been quite bearish on the company in the past due to the flagging performance of its Leisure segment. However, management has addressed this through the acquisition of the fast-growing Macpac brand. I’m optimistic that this acquisition will be a success and support the growth of the rest of the business.

This could potentially put Super Retail in a position to grow its dividend at a strong rate just like its industry peer. It has recently been named as the top dividend pick.

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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. The Motley Fool Australia owns shares of Super Retail Group 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 Scott Phillips.

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