On Tuesday the Reserve Bank of Australia will almost certainly cut the cash rate down to a record low of 1.25%.
Unfortunately for income seekers, this is likely to put pressure on the interest rates offered with savings accounts and term deposits.
In light of this, I think now would be a great time to consider skipping these interest-bearing assets and buying the three dividend shares listed below instead. Here's why I like them:
Coles Group Ltd (ASX: COL)
I think this supermarket giant is a great long-term option for income investors. This is due to its defensive qualities, strong market position, positive dividend policy, and focus on automation. The latter is expected to give its margins a significant boost in the coming years and should support solid profit and dividend growth. Coles' current dividend policy consists of paying out 80% to 90% of its earnings as dividends. Based on this, I estimate that its shares currently provide a forward fully franked 4.4% dividend yield.
Super Retail Group Ltd (ASX: SUL)
Super Retail is the retail group behind brands including Macpac, Rebel, and Supercheap Auto. I've been impressed with the way the company has continued to generate solid profit growth this year despite the tough trading conditions being faced by retailers. So, with consumer sentiment and spending tipped to rebound following the election and possible recovery in the housing market, I believe it is well-placed to see its earnings growth accelerate in FY 2020. This could put the Super Retail board in a position to increase its dividend once again. At present its shares offer a trailing fully franked 5.3% dividend yield.
Westpac Banking Corp (ASX: WBC)
I would sooner invest my money in this banking giant's shares than leave it to gather only paltry interest in ones of its savings accounts. Especially considering its shares currently offer one of the most generous dividend yields on the Australian share market. At present Westpac provides a trailing fully franked 6.8% dividend yield, which is significantly higher than the market average. Pleasingly, with the housing market looking like it could recover in 2020, I believe Westpac is well-placed to at least maintain this dividend over the coming years.
