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Should you buy Telstra and these ASX dividend shares next week?

With an average dividend yield of almost 4%, the Australian share market is one of the most generous in the world. Which certainly is good news for income investors in this low interest rate environment.

Three dividend shares that offer above-average yields are listed below. Here’s why I like them:

Dicker Data Ltd (ASX: DDR)

One of my favourite dividend shares for some time has been this distributor of information technology products. It has been growing at a strong rate over the last few years, which has allowed its board to increase its dividend materially. The good news is that FY 2019 looks set to be another record year for the company following a strong first quarter which saw the company post a 21.1% increase in revenue to $386.9 million and a 46.7% lift in profit before tax to $13.5 million. Despite its shares rallying strongly on the news, they still offer a forward fully franked 4.6% dividend yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

With rates set to stay lower for longer, I think this “bond proxy” would be a great option for income investors. Bond proxies are shares that are expected to offer predictable returns over a long period of time, much like a traditional bond. I believe Sydney Airport is well-placed to achieve this thanks to the global tourism boom and its position as the main gateway into Australia. The airport operator’s shares currently offer a trailing 4.9% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final dividend share to consider buying is this telco giant. I think the decision by the ACCC to block the TPG-Vodafone Australia merger is a big positive for Telstra and will allow it to entrench its first mover advantage in 5G. In addition to this, I feel cost cutting opportunities and its improved performance means its dividend is sustainable at 16 cents per share. This equates to a fully franked 4.6% dividend yield based on its last close price.

And finally, here is a fourth dividend share which has recently been rated as the best on the market.

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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, Sydney Airport Holdings Limited, TPG, and Telstra 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.

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