According to the RBA Rate Indicator for June 2019, the market has now priced in a 100% probability of a cash rate cut to 1.25% next week.
Although this is good news for borrowers, it is disappointing for savers and income investors who will have to contend with even lower interest rates.
But don't worry because the Australian share market is here to save the day with its large number of quality shares offering generous dividend yields.
Three that I would buy right now are listed below:
Australia and New Zealand Banking Group (ASX: ANZ)
Whilst arguably all the big four banks are in the buy zone, ANZ is my top pick in the banking sector at present. This is because I believe it is well-positioned to deliver modest underlying earnings per share growth over the medium term thanks to its strong capital position, share buybacks, cost cutting opportunities, and the potential rebound in the housing market. In respect to the latter, I feel the surprise election result and APRA's plan to reduce the mortgage serviceability threshold are big positives for the housing market and could put an end to the downturn. At present ANZ's shares provide a trailing fully franked 5.7% dividend yield.
Aventus Group (ASX: AVN)
Another dividend share to consider buying is Aventus Group. It is a fully integrated owner, manager, and developer of large format retail centres with a portfolio of 20 sites across Australia. Thanks to the popularity of this retail format and its high quality tenants, Aventus reported a 98.5% occupancy rate in the first half of FY 2019. Due to the combination of this high occupancy rate and periodic rental increases, I feel Aventus is well-placed to increase its distribution over the long-term. Its units currently provide a trailing 7.25% distribution yield.
Transurban Group (ASX: TCL)
A final dividend share to consider buying is this leading toll road operator. Over the last decade the company has been able to grow its dividend at a solid rate thanks to increasing toll prices and growing demand for its roads in Australia and North America. Pleasingly, I expect this positive trend to continue over the next decade, especially after its recent Westconnex acquisition. At present its units provide investors with a trailing distribution yield of 4.3%.
