The cash rate is currently at a record low and has been tipped to be taken even lower by the Reserve Bank later this year.
In light of this, I think it would be better putting your money to work in the share market than leaving it to gather only paltry interest in a savings account. Especially given the large number of quality dividend shares offering generous yields.
Three dividend shares I think income investors ought to buy next week are listed below:
Australia and New Zealand Banking Group (ASX: ANZ)
Whilst arguably all big four banks are in the buy zone right now, if I were to choose just one I would invest in ANZ. I'm optimistic that its shares will provide solid returns for shareholders over the next few years despite the tough trading conditions that it faces. This is due to my belief that ANZ can still carve out modest earnings growth in the coming years thanks to its exposure to commercial lending and cost cutting opportunities. Another bonus is that due to its CET1 ratio being notably higher that APRA's target, I believe it has the balance sheet flexibility to consider more capital returns. At presents ANZ's shares provide investors with a trailing fully franked 6.15% dividend yield.
National Storage REIT (ASX: NSR)
Another high yield dividend share to consider is National Storage. It is one of the largest self-storage owner-operators in Australasia with 146 storage centres. Pleasingly, management has plans to continue growing its network in the medium term, which I expect to result in solid income and distribution growth. This year National Storage plans to pay a full year distribution of 9.6 cents to 9.9 cents per unit, which equates to a yield of between 5.5% to 5.7%.
Wesfarmers Ltd (ASX: WES)
I think that this conglomerate could be a good option for income investors right now. Although I have a few concerns over its potential Lynas Corporation Ltd (ASX: LYC) takeover, management does have a strong track record of making successful and earnings accretive acquisitions. If this acquisition is a success then it would position Wesfarmers to grow its dividend at a solid rate over the next few years. For now, though, I estimate that its shares will provide a dividend yield of approximately 4.7% over the next 12 months.
