With the outlook for interest rate rises looking rather subdued, I think income investors ought to consider making use of the generous dividends on offer on the Australian share market.
Three which I think are great options for income seekers are listed below:
Aventus Retail Property Fund (ASX: AVN)
Although Aventus’ shares have been on a tear since February and risen 12.5%, I don’t think it is too late to consider an investment. Aventus is a retail property group which owns 20 retail parks across Australia. When the group released its half-year results earlier this year it reported occupancy levels of 98.6%. Which I think is impressive given the tough trading conditions that retailers have faced. The reason for this, though, is that the company has many of the biggest retailers as tenants such as Bunnings, The Good Guys, Officeworks, and Harvey Norman Holdings Limited (ASX: HVN). I think these are less likely to close stores and default on rent payments than smaller independent retailers. Based on its outlook and past distributions, I estimate that its shares provide a 7% distribution yield presently.
WAM Capital Limited (ASX: WAM)
WAM Capital is a leading investment company which offers investors a trailing fully franked 6.4% dividend at present. Thanks to the success of its portfolio of funds, WAM Capital is on course to lift its dividend for the ninth year in a row in FY 2018. And should this solid performance continue in FY 2019, the listed investment company will be in a position to make it a decade of dividend increases. There aren’t many on the market with as good a record as this. I think this makes it a great buy and hold option for income investors.
Westpac Banking Corp (ASX: WBC)
Although its shares have recovered from multi-year lows, I still see a lot of value in this banking giant’s shares. While conditions in the sector are undoubtedly tough, I think potential out of cycle rate rises could allow Westpac to continue growing its earnings at a modest rate. So with its shares trading on lower than average multiples, I feel it could be a good option for investors with no exposure to the banking sector. Its shares provide a market-beating trailing fully franked 6.4% dividend currently.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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.