Last week a survey by the AFR revealed that Australian economists currently expect the next cash rate hike by the Reserve Bank to come in June 2020.
In light of this, I feel it could be as late as 2022 until rates return to normal levels again.
While this is good news for borrowers, it is anything but for savers and income investors.
Luckily, the Australian share market is here to save the day with some quality dividend shares offering generous yields.
Should you buy these three dividend shares?
Dicker Data Ltd (ASX: DDR)
Dicker Data is a computer software and hardware distributor that specialises in servicing small and medium sized businesses with presales capabilities, value added services, and emerging hybrid end to end technology solutions. I think its attractive valuation, positive growth prospects, and high levels of insider ownership make it a great option for income investors. This year the company plans to pay an 18 cents per share, which equates to a fully franked yield of just under 6.3%.
Super Retail Group Ltd (ASX: SUL)
The shares of the retail group behind brands including Rebel, Macpac, and Super Cheap Auto are currently trading at 9x earnings and offer a trailing fully franked 7.4% dividend. This could make it worth considering this month. However, a disappointing trading update out of Kathmandu Holdings Ltd (ASX: KMD) last week has sparked fears that the retail industry may have struggled during the Christmas period. Because of this, it may be prudent to wait for an update from Super Retail before picking up shares.
Westpac Banking Corp (ASX: WBC)
In a few weeks the Royal Commission final report is due to be released. I’m optimistic the report will include no nasty surprises and lead to investors returning to the banks to take advantage of their cheap prices and generous dividend yields. My pick of the bunch at the moment is Westpac due to the below average multiples it trades on and sizeable 7.4% dividend.
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of Super Retail Group Limited. 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.