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3 top dividend shares for income investors

With an average dividend yield of approximately 4.1%, I think the Australian share market is a great place for those in search of a source of income.

Three top dividend shares that I would buy this month are listed below. Here’s why I like them:

Adairs Ltd (ASX: ADH)

I think that this home furnishings retailer is one of the best options in the retail sector right now. Adairs was an impressive performer in FY 2018 and delivered a 45.4% increase in profits to $30.6 million thanks partly to strong like for like sales growth. Pleasingly, momentum has carried over into FY 2019, putting it in a great position to outperform once again. If this does happen then I believe there’s a strong chance it could lead to its shares rerating to a more appropriate and higher earnings multiple. At present Adairs’ shares offer a trailing fully franked 5.8% yield.

Australia and New Zealand Banking Group (ASX: ANZ)

On Thursday this banking giant lifted its variable mortgage rates in an effort to offset increasing funding costs. I believe this was a smart move and will put the bank in a stronger financial position. And with the majority of its peers also following suit, I don’t expect it to have any impact on competition. All in all, I believe ANZ Bank could be a good option for income investors over the coming years. Its shares currently provide a trailing fully franked 5.6% dividend.

National Storage REIT (ASX: NSR)

Another top option for income investors could be this real estate investment trust which has a focus on self-storage assets. Last month the storage company posted a 12.5% increase in underlying earnings to $51.4 million. The company’s strong performance in FY 2018 allowed the board to lift its distribution to 9.6 cents per unit, which equates to a trailing yield of 5.7% based on its last close price. Thanks to the market being highly fragmented and demand being strong, I believe the company has solid long-term growth prospects and its dividend could grow at a decent rate over the coming years.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.