My top dividend picks for October

On Tuesday the Reserve Bank of Australia will almost certainly keep rates on hold for yet another month when it meets to discuss the cash rate.

Unfortunately for savers, I expect this will be the case for the rest of the year and all of 2019.

But the good news is that the Australian share market has plenty of quality options that offer dividend yields that are vastly superior to the interest rates on offer with savings accounts and term deposits.

Three that I would consider in October are as follows:

Adairs Ltd (ASX: ADH)

I think this home furnishings retailer could be a great dividend share to consider buying in October. A strong full year result in FY 2018 allowed its board to declare a total dividend of 13.5 cents per share, up 68% year on year. This equates to a trailing fully franked 5.9% yield at the last close price. Thanks to the success of its homemaker store strategy and its fast-growing online business, I expect this dividend to continue growing strongly over the next few years.

Dicker Data Ltd (ASX: DDR)

Dicker Data is a founder-led computer software and hardware wholesale distributor and one of my favourite dividend shares on the ASX. Due to its strong business model and growth opportunities, I believe it is in a great position to continue growing its profits and dividend over the coming years. This year the Dicker Data board intends to declare a total dividend of 18 cents per share, equating to a yield of 6%.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust with a diverse and quality portfolio comprising 44 properties across six different agricultural sectors including cattle, wine, and cotton production. The properties have a weighted average lease expiry of 12.3 years, which provides stability of income and long term rental growth via a mix of indexation mechanisms. I believe this will result in growing earnings and distributions over the next few years at least. This year management plans to pay a distribution of 10.43 cents per unit, equating to a forward yield of 4.7%.

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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 and has recommended Dicker Data Limited and RURALFUNDS STAPLED. 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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