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Why I would buy ANZ and these high yield ASX dividend shares

Luckily for savers and income investors in this low interest rate environment, the Australian share market is one of the most generous in the world with an average dividend yield of approximately 4%.

Whilst this yield is vastly superior to those on offer with term deposits and savings accounts, you don’t have to settle for 4%.

Three shares that offer even greater yields are listed below. Here’s why they could be worth snapping up this month:

Adairs Ltd (ASX: ADH)

Whilst the housing market downturn has impacted the performance of many retailers with exposure to it, I’ve been positively surprised by the strong performance of this home furnishings retailer in FY 2019. In the first half Adairs reported 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 advised that second half trading started strongly, with same store sales growth of 7.1% during the first seven weeks. Last month a couple of directors topped up their holdings with sizeable share purchases, which I would interpret as a sign that things are going well. So, with its shares changing hands at 9x trailing earnings and offering a generous 8% dividend yield, I think it could be a great option for income investors.

Westpac Banking Corp (ASX: WBC)

If you don’t already have exposure to the banks then it could be worth considering an investment in Westpac’s shares today. Although Australia’s oldest bank posted a reasonably disappointing half year result earlier this month, the strength of its balance sheet allowed the Westpac board to maintain its interim dividend at 94 cents per share fully franked. Although you’re too late for this dividend, I remain optimistic that the bank will be able to grow its earnings at a modest rate in the coming years and maintain its dividend. If it does achieve this, its shares will provide a generous 7% dividend yield. As well as Westpac, I think Australia and New Zealand Banking Group (ASX: ANZ) and its trailing full franked 6.1% dividend yield could be worth considering.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. 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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