With an average dividend yield of approximately 4%, the Australian share market is one of the most generous in the world. Which certainly is a big positive in this low interest rate environment.
But with so many dividend shares to choose from, it can be hard to decide which ones to add to your portfolio.
To narrow things down I have picked out three top dividend shares that I think are in the buy zone right now. They are as follows:
Adairs Ltd (ASX: ADH)
Adairs is one of Australia’s largest homewares retailers with a total of 166 stores and a fast-growing online business. I’ve been impressed with the company’s performance over the last 18 months despite the housing market downturn. In the first half of FY 2019 Adairs posted a 10.6% increase in sales to $164.4 million and a 9.1% lift in net profit after tax to $14.9 million. It also reported like-for-like sales growth of 7.1% for the first seven weeks of the second half. I believe this has positioned it well to deliver a strong full year result and increase its final dividend again. At present Adairs’ shares offer a trailing fully franked 8.5% dividend.
Dicker Data Ltd (ASX: DDR)
Dicker Data is a leading wholesale distributor of computer hardware and software in Australia and New Zealand. Its shares have been strong performers over the last 12 months thanks to the company’s impressive performance in FY 2018 and positive outlook for the year ahead. In respect to the latter, management recently advised that it expects to achieve sales and profit growth of 10% in FY 2019. It also intends to pay a 22 cents per share dividend in FY 2019, which equates to a forward fully franked 5.7% yield.
National Australia Bank Ltd (ASX: NAB)
Whilst I think that all big four banks are in the buy zone at the moment, one of my favourites in the group is NAB. And whilst there are concerns that the bank may be forced to cut its dividend in order to meet APRA’s stated unquestionably strong capital requirement of 10.5%, I believe this has already been priced into its shares. NAB’s shares offer a trailing fully franked 8% dividend at present.
Where to invest $1,000 right now
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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 Dicker Data Limited. The Motley Fool Australia owns shares of National Australia Bank 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.