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Why I would buy ANZ and these fully franked ASX dividend shares this week

With savings accounts and term deposits offering only paltry interest rates at present, I think savers should put their money to work in the share market.

After all, with an average dividend yield of ~4%, the local market is one of the most generous in the world.

Three dividend shares which I would buy are listed below:

Adairs Ltd (ASX: ADH)

Given the surprise election result at the weekend, I think now could be a great time to consider picking up this home furnishings retailer’s shares. As well as being a positive for the housing market, the election result is expected to provide a big boost to consumer confidence and spending thanks to tax cuts. This could put Adairs in a great position to build on its strong first half result which saw it report a 10.6% increase in sales to $164.4 million and a 9.1% lift in net profit after tax to $14.9 million. At present the retailer’s shares provide a very generous trailing fully franked 8.3% dividend yield.

Australia and New Zealand Banking Group (ASX: ANZ)

My favourite option in the banking sector right now is ANZ. This is due to its strong capital position, cost cutting opportunities, and exposure to SME lending. Overall, I believe this has left the bank well-placed to at least maintain its current dividend and grow its underlying earnings at a modest rate over the next few years. At present ANZ’s shares offer investors a trailing fully franked 5.7% dividend yield.

Wesfarmers Ltd (ASX: WES)

Another top option for income investors could be this conglomerate. As I mentioned above, the election result is expected to give the retail sector a major boost over the next 12 months thanks to tax cuts. In addition to this, with the Morrison government’s policies expected to support the housing market, Wesfarmers’ key Bunnings business could be well-positioned to benefit. Overall, this and potential earnings accretive acquisitions could underpin solid earnings and dividend growth over the next few years. I estimate that Wesfarmers’ shares will provide investors with a fully franked 4.3% dividend yield over the next 12 months.

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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 Wesfarmers 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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