This afternoon the Reserve Bank of Australia kept rates on hold at 1.5% for another month, meaning it has now been two years without a change.
With many economists expecting rates to stay on hold for a third year, I continue to believe investors ought to skip savings accounts and term deposits in favour of the dividend shares on the Australian share market.
Three which I would buy are listed below:
Baby Bunting Group Ltd (ASX: BBN)
This baby products retailer's shares currently offer investors a trailing fully franked 4.1% dividend. Although I think there's a reasonable chance that this dividend will be cut slightly this month, I still feel it is well worth being patient with Baby Bunting. After all, the company is currently facing some short term headwinds from the clearance sales of competitors. But once these are out of the way I expect Baby Bunting to seize on the vacated market share and return to growth again.
Dicker Data Ltd (ASX: DDR)
This founder-led computer software and hardware wholesale distributor could be a great option for income investors. In FY 2018 the company intends to pay a full-year dividend of 18 cents per share, equating to a fully franked 6% yield based on the current share price. Pleasingly, given the strength of its business, positive trading conditions, and new vendor agreements, I believe this dividend could grow at a solid rate over the coming years.
WAM Capital Limited (ASX: WAM)
WAM Capital is a listed investment company that provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies listed on the Australian share market. Due to the strong performance of its funds over the last 12 months, I feel confident that WAM Capital will increase its dividend this year, marking the ninth year in a row of dividend increases. Its shares currently offer a trailing fully franked 6.2% dividend.
