Investors looking for shares to buy in 2019 should consider adding some strong dividend payers to their portfolio.
With volatility picking up, having a reliable income stream will help investors sleep soundly at night and forget about the mood of the market.
Here’s a couple of ideas to consider…
Aventus Retail Property Fund (ASX: AVN)
Aventus is a real estate investment company which owns 20 large format retail centres (think big, bulky products) around Australia worth $2 billion.
Tenants are a diverse mix of retailers including Bunnings Warehouse, Good Guys, Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK), with no tenant representing more than 4% of the rental income.
These type of tenants are likely to do relatively well despite fears around Amazon. Reason being, these businesses are selling mostly large physical products which people often want to check out in person before buying.
More than 85% of leases have contracted rent increases,with either a fixed rate or CPI. Aventus expects to pay a distribution of 16.6 cents per share this financial year, which means shares are currently trading on a yield of 7.7%.
Spark Infrastructure Group (ASX: SKI)
Spark owns regulated utility assets. Specifically, electricity networks in three states, including Victoria Power Networks, SA Power Network and TransGrid.
The company has strong and reliable cashflow which is inflation protected. This gives Spark the ability to pay a solid income stream to shareholders, regardless of what’s happening in the market. Since 2011, the distribution has increased every year, and is forecast to increase another 4.9% this year.
Spark is far from an exciting business, but a strong and recurring income stream should provide comfort to investors during market volatility. Having said that, Spark is still looking to the future by investing in renewable projects, with 8 completed and 4 currently under construction.
Shares currently trade on a distribution yield of 7%
Despite the market volatility, these companies should continue to provide reliable income to shareholders and are worth considering as part of a diversified portfolio.
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Motley Fool contributor Dave Gow owns shares of AVENTUS RE UNIT. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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