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Why I think retirees should buy ANZ and 2 other dividend shares

With rates going nowhere for some time, if I were a retiree I would look to the share market for a source of income.

After all, with an average dividend yield of approximately 3.9%, the Australian share market offers income investors far better potential returns than savings accounts and term deposits put together.

Three shares that I believe would be suitable for retirees in search of income are listed below:

Australia and New Zealand Banking Group (ASX: ANZ)

With this banking giant’s shares currently offering investors a trailing fully franked 6% dividend, I would much rather have my money invested in its shares than sitting in one of its high interest savings accounts. Especially as I believe the bank will be in a position to increase its dividend in FY 2019 thanks to cost saving opportunities, out of cycle rate hikes, and its exposure to a solid performing business lending market.

National Storage REIT (ASX: NSR)

Although this self-storage-focused real estate investment trust’s units have just risen to a 52-week high, they still provide investors with a 5% distribution yield. I believe this distribution could increase at a solid rate over the coming years thanks to growing demand for its existing 127 storage centres across Australia and New Zealand. In addition to this, the trust has a sizeable cash balance to fuel its growth through acquisitions and developments. At its last update management revealed it was actively considering $100 million worth of acquisitions.

Wesfarmers Ltd (ASX: WES)

Another option for retirees to consider is this conglomerate which provides a generous estimated 5.7% dividend yield. As well as providing income, I think Wesfarmers’ shares could climb notably higher over the coming years following the restructure of its portfolio last year. I feel this made Wesfarmers a stronger company and put it in a position to accelerate its growth through earnings accretive acquisitions. This could make it one of the better blue chips for retirees to consider buying this month.

NEW! Analyst Names Best 3 Dividend Picks for 2019

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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 Wesfarmers Limited. The Motley Fool Australia has recommended National Storage REIT. 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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