According to the latest ASX 30 Day Interbank Cash Rate Futures, there is now a 39% chance of a rate cut by the Reserve Bank of Australia at next week’s meeting.
This is down from 68% around a week earlier, indicating that the market has become less convinced that a rate cut is coming at this meeting.
Whilst a rate cut may be unlikely next week, most economists agree that one is on the horizon. In light of this, I think investors ought to prepare for low interest rates to be around for much longer than anticipated.
Three top dividend shares which I think income seekers ought to buy are listed below. Here’s why I like them:
Coles Group Ltd (ASX: COL)
I believe this supermarket giant would be a great option for income investors. Last week Coles released its third quarter sales update which revealed solid growth in food and liquor sales. I think this strong quarter has put the company in a good position to deliver a solid full year result in August, potentially allowing it to reward shareholders with a generous final dividend. Management has previously stated that it will pay out between 80% and 90% of its earnings as dividends. Based on this, I estimate that its shares currently offer investors a fully franked forward 4.4% dividend yield.
Dicker Data Ltd (ASX: DDR)
Dicker Data is a wholesale distributor of computer hardware and software. In FY 2018 the company posted a 14.4% increase in revenue to $1.5 billion and a 20.5% lift in net profit after tax to $32.5 million. This was not only ahead of the market’s expectations, but also its own guidance. Pleasingly, management expects more of the same in FY 2019 and has provided guidance for at least 10% growth in revenue and profit. It also intends to increase its fully franked full year dividend by 22% to 22 cents per share, which equates to a forward 5.1% yield.
Super Retail Group Ltd (ASX: SUL)
I think Super Retail is another dividend share to consider buying next week. Last week the retail group behind brands including Macpac and Super Cheap Auto provided a trading update and revealed that its sales performance in the second half has remained solid. It achieved like for like sales growth of 4.3% during the 17 weeks to April 27, which I believe puts it in a position to increase its dividend again this year. At present its shares provide an attractive trailing fully franked 6.5% dividend yield.
And finally, here is the dividend share rated as the best one to buy in May.
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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 COLESGROUP DEF SET and Dicker Data Limited. 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.