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Beat low rates with these generous dividends

Next week the Reserve Bank of Australia will meet once again for its July cash rate meeting.

This meeting will almost certainly result in the central bank keeping rates on hold at the record low of 1.5% for yet another month.

In fact, many economists are tipping this to be the case for all meetings in 2018 and even 2019. This means low rates are here for some time to come.

But don’t worry because you can beat low rates with one of these generous dividends:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting’s shares have been under a lot of selling pressure this year after being subjected to incredibly tough trading conditions from the closure of competitors including Toys R Us. While this is likely to lead to a weak FY 2018 result, I expect things to improve greatly next year and for the company to win the vacated market share. I think this could make it worth considering a patient investment. At present Baby Bunting’s shares provided a trailing fully franked 4.9% dividend.

National Storage REIT (ASX: NSR)

Although this storage giant’s shares have gone ex-dividend today, I still think it would be worth considering a long-term investment due to its growing network of facilities, strong market position, and rising demand for storage services. I feel this puts it in a good position to grow its earnings and distribution at a steady rate over the coming years. In FY 2018 the company paid an annual distribution of 9.6 cents per share, equating to a yield of 5.9%.

Super Retail Group Ltd (ASX: SUL)

I think Super Retail is a great option for investors due to its attractive valuation and generous dividend yield. At present the retail group’s shares are changing hands at just 12x estimated full-year earnings and offer a trailing fully franked 5.6% dividend. This dividend could grow at a decent rate in the future if the company’s Macpac acquisition is a success and turns around the performance of its struggling Leisure segment.

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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 Super Retail Group Limited. The Motley Fool Australia has recommended National Storage REIT. 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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