On Tuesday the Reserve Bank of Australia cut the cash rate down 1.25% in the hope of boosting the economy.
Most economists agree that one cut is unlikely to be enough and the central bank will have to cut rates down to at least 1% in the coming months.
This means savers are likely to endure a long period of low interest rates and low returns if they choose to invest their money in cash. And once you take into account inflation and tax, investors could be left with no real return or even a loss.
To combat this, I think investors should consider shares that offer generous dividend yields with the potential for capital gains on top.
Here are three options that I think look attractive right now:
Accent Group Ltd (ASX: AX1)
Accent Group is the footwear-focused retail group behind retail brands including Athlete's Foot, HYPE DC, and Platypus. It also owns exclusive license agreements for a number of popular footwear brands such as Timberland. The company has been a strong performer in FY 2019 despite weak consumer sentiment and spending. It achieved a 27.3% increase in net profit after tax to $32.2 million during the first half. More growth is expected in the second half, putting the Accent Group board in a position to consider lifting its dividend once again. At present its shares offer a trailing fully franked 5.9% dividend yield.
Dicker Data Ltd (ASX: DDR)
As a distributor of information technology products across Australia and New Zealand, Dicker Data may not be the most exciting share to invest in. But the returns that it has generated for shareholders over the last five years certainly have been exciting. Thanks to strong sales, profit, and dividend growth, the company's shares have provided investors with an average total return of 29% per annum over this period. I'm confident the company is well-placed to deliver further solid profit and dividend growth over the next five years, making it worth considering as a long-term investment today. Dicker Data's shares currently offer a forward fully franked 4.4% dividend yield.
Rural Funds Group (ASX: RFF)
A third and final share to consider is Rural Funds. It owns a portfolio of diversified agricultural assets which include poultry farms, cattle production, premium vineyards, and almond and macadamia orchards. I believe Rural Funds is well-placed to generate solid total returns for investors over the next decade thanks to the quality of its assets and tenants, its long-term leases, and periodic rental increases. At present, its units offer investors a 4.6% forward distribution yield.