Given today's disappointing wage data and previous underwhelming economic data, I think there's a good chance the Reserve Bank of Australia will cut rates next month.
If this proves to be the case then it could be some time before the interest rates on savings accounts and term deposits return to more normal levels.
The good news is that the Australian share market is home to a large number of dividend shares that offer yields that smash other interest-bearing assets.
Three that I would buy today are listed below:
Dicker Data Ltd (ASX: DDR)
Dicker Data is one of the ANZ region's largest distributors of information technology products. I've been very impressed with the way the company has been growing over the last few years and was pleased to see that this has continued in FY 2019. Dicker Data recently released its first quarter update which revealed a 21.1% increase in revenue to $386.9 million and a 46.7% lift in profit before tax to $13.5 million. At present its shares offer a forward fully franked 4.3% dividend yield. This dividend will be paid in quarterly instalments, with the first instalment due in the coming weeks.
National Storage REIT (ASX: NSR)
I think that this self-storage operator would be a great option for income investors. It had a strong start to FY 2019, reporting a solid 17.4% increase in underlying earnings to $26.3 million in the first half of FY 2019. Pleasingly, management remains positive on its long-term outlook and sees plenty of opportunities to grow both organically and inorganically in a highly-fragmented storage industry. This year National Storage intends to pay a distribution of between 9.6 cents and 9.9 cents per unit, which equates to a forward yield of between 5.6% and 5.8%.
Transurban Group (ASX: TCL)
With rates likely to go lower in the coming months, I think bond proxies like Transurban could increase in popularity in the near future. Transurban is regarded as a bond proxy as it is expected to offer predictable returns over a long period of time, much like a traditional bond. It has been able to achieve this through a combination of growing demand for its roads and increasing toll prices. I don't expect this to change any time soon, which could make it a top long term option for income investors. At present its units provide investors with a trailing distribution yield of 4.2%.
