With the Reserve Bank of Australia tipped to keep rates on hold until 2020 by some economists, the low interest environment we are living in doesn’t look likely to be ending any time soon.
Luckily the Australian share market is coming to the rescue of income investors with a plethora of dividend shares that offer yields of 5% and above.
Two that I think are great options for income investors are listed below:
Australia and New Zealand Banking Group (ASX: ANZ)
Although bank shares have pushed notably higher over the last couple of weeks, I think ANZ Bank and the rest of the big four are still trading at very attractive levels for both value and income investors. At the current price, ANZ Bank’s shares offer a trailing fully franked 5.6% dividend. While there are concerns that a dividend cut could be on the horizon, one broker that doesn’t appear to agree is Goldman Sachs. Earlier this month it once again retained its conviction buy rating and $32.92 price target on the bank’s shares.
BWP Trust (ASX: BWP)
One of the best performing retailers in Australia over the last few years has been Bunnings Warehouse, which is owned and operated by Wesfarmers Ltd (ASX: WES). While you could invest in Wesfarmers to get exposure to it, I actually think one of the best ways to gain exposure to Bunnings is through BWP Trust. This is because BWP Trust is a listed managed investment scheme which invests in commercial real estate throughout Australia and rents the majority of its properties out to Bunnings Warehouse. Considering Bunnings’ ongoing success, I think BWP Trust can continue growing its earnings and distribution at a solid and predictable rate for the foreseeable future. BWP Trust’s shares currently provide a trailing 5.4% dividend.
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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 Wesfarmers Limited. The Motley Fool Australia has recommended BWP Trust. 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.