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Why I would buy ANZ Bank and 2 other high yield dividend shares

If a recent survey of economists by the AFR proves accurate, the Reserve Bank of Australia will not be lifting the cash rate until the middle of 2020.

This could mean that the slender interest rates on offer with term deposits and bank accounts are here to stay for some time to come.

But don’t worry because the Australian share market has come to the rescue of income investors with its multitude of dividend options.

Three to consider this week are as follows:

Australia and New Zealand Banking Group (ASX: ANZ)

I would sooner have my money invested in ANZ Bank’s shares than have it deposited in one of its savings accounts. Especially with the banking giant’s shares trading at lower than normal levels and offering an above-average dividend yield. At present ANZ Bank’s shares provide income investors with a trailing fully franked 6.3% yield.

Rio Tinto Limited (ASX: RIO)

If you’re looking for income and a little exposure to the resources sector then Rio Tinto could be a great way to achieve this. Given the quality of its operations and the significant free cash flow they are generating, I expect the mining giant to reward shareholders handsomely with dividends again in 2019. Its shares currently provide a trailing fully franked 5% yield.

Super Retail Group Ltd (ASX: SUL)

While it might be prudent to wait for a trading update from the retail group behind brands including Rebel, Macpac, and Super Cheap Auto, I feel that a recent decline in its share price has already factored in a weaker than expected Christmas trading period for its brands. So with its shares now changing hands at around 9x earnings and offering a trailing fully franked 7.4% dividend, it certainly is a very tempting option and one that I feel provides a compelling risk/reward.

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

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