With an average dividend yield of approximately 4%, there certainly is a lot of choice for income investors.
Which is fortunate because it looks like that interest rates will be stuck at low levels for some time to come.
To help you narrow down your search, I've picked out three dividend shares that have been rated as buys this week. Here's why brokers like them:
G8 Education Ltd (ASX: GEM)
According to a note out of Ord Minnett, its analysts have retained their buy rating and lifted the price target on this childcare centre operator's shares by 26% to $3.60. The broker made the move on the belief that the childcare industry has its worst days behind it and growth should be on the horizon again. Its analysts expect G8 Education to pay a fully franked 16 cents per share dividend in FY 2019, which equates to a forward 4.7% yield today.
IPH Ltd (ASX: IPH)
A note out of Goldman Sachs reveals that its analysts have initiated coverage on this intellectual property services company with a buy rating and $6.50 price target. According to the note, the broker likes IPH due to its market leading position in ANZ and Singapore and growing share in China. In addition, Goldman notes that the company is leveraged to global innovation/technology and GDP growth, offers annuity style revenues, and has long-standing client relationships. Goldman expects the company to pay out 90% of its earnings as dividends. So based on its EPS estimate of 31 cents in FY 2019, I estimate that its shares currently offer a 4.7% forward dividend.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Analysts at Morgan Stanley have retained their overweight rating and $7.07 price target on this airport operator's shares after the Productivity Commission released its draft review of airport regulation. That review found no evidence of Sydney Airport gouging its customers, though it did recommend airports provide more detailed information to regulators in the future in order to prevent potential abuses of market power. In light of this, Morgan Stanley has held firm with its rating and forecasts. It expects a dividend of 40 cents per share in FY 2019, which equates to a 5.8% yield at present.
