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3 top income shares that I would buy in August

The Australian share market is home to a great number of shares that provide generous dividend yields. So much so it can be hard to decide which ones to buy.

Three that jump out at me as great options in August are listed below. Here’s why I like them:

Rio Tinto Limited (ASX: RIO)

Investors that are interested in gaining exposure to the resources sector might want to consider Rio Tinto. The mining giant has been offloading a large amount of its non-core assets this year and is widely expected to return the funds raised to shareholders through dividends and share buybacks. And if a global trade war doesn’t derail strong global economic growth, I believe it could benefit from favourable commodity prices and generate high levels of free cash flow. This should put it in a position to grow its dividend, which at present offers a trailing fully franked 4.5% yield.

WAM Capital Limited (ASX: WAM)

WAM Capital is a top listed investment company which provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies listed on the ASX. For a number of years now WAM Capital has achieved its aim of delivering investors a stream of fully franked dividends, capital growth, and capital preservation. Pleasingly, the success of its funds this year means that the company is on course to reward shareholders with a ninth dividend increase in as many years. This means that its shares now offer a trailing fully franked 6.3% dividend at present.

Westpac Banking Corp (ASX: WBC)

The banking sector has been a difficult place to invest over the last 12 months due largely to the negative news flowing out of the Royal Commission and Australia’s cooling housing market. The good news is that I believe the worst is over now and that all known risks have been priced into their shares. Because of this, I feel it could be an opportune time to consider snapping up shares in Westpac if you don’t already have meaningful exposure to the banks. Especially given its generous trailing fully franked 6.4% dividend.

Breaking news: ASX companies set to raise dividends!

It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. 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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