Fortunately in this low interest rate environment, the Australian share market is home to a large number of shares offering generous dividend yields.
Three popular dividend options right now are listed below. Are these shares in the buy zone?
National Storage REIT (ASX: NSR)
National Storage is one of the largest self-storage providers in the Australia and New Zealand market with a network of 146 centres. It also has 12 expansion and development projects currently in various stages of progress and plans in place for multiple new sites and repurposing/expansions of existing sites. Thanks to this expansion, solid demand for its services, and its growth through acquisition strategy in a highly fragmented market, I believe it is well-placed to grow its income and distribution at a solid rate for the foreseeable future. At present its shares offer a trailing yield of 5.2%.
Super Retail Group Ltd (ASX: SUL)
I think that Super Retail is a great option for both income and value investors. Despite achieving strong profit growth in the first half and providing a positive outlook for the rest of FY 2019, the shares of the company behind retail brands such as Macpac, Rebel, and Supercheap Auto are changing hands at just 12x trailing earnings. They also provide a generous trailing fully franked 5.3% dividend yield. I think this makes it too cheap to ignore and suspect a solid second half could lead to its shares re-rating higher.
Telstra Corporation Ltd (ASX: TLS)
Thanks to the early success of its T22 strategy and its solid first half performance, Telstra's shares have been on fire in 2019. Despite this strong gain and based on the assumption that Telstra will cut its final dividend down to 8 cents per share, I estimate that its shares offer a forward fully franked 4.25% dividend yield. I think could make it a good option for income investors, especially with things looking a lot more positive for it now that the NBN rollout has peaked and competition in the industry is becoming more rational. Furthermore, its leadership position in 5G could be a key driver of growth over the next few years. Combined with its significant cost cutting program, I'm optimistic it could lead to modest profit growth from FY 2020 onwards.
