The Australian share market is one of the most generous in the world, offering investors an average dividend yield of ~3.8%.
But with so much choice, it can be hard to decide which dividend shares to buy. To narrow things down I've picked out three which I think are in the buy zone:
Accent Group Ltd (ASX: AX1)
With tax cuts on the way, consumer sentiment and spending is expected to improve over the coming months. This could make it a good time to get a little bit of exposure to the retail sector. One top option in the sector is Accent Group, the footwear-focused retail group behind retail chains including Athlete's Foot, HYPE DC, and Platypus. In the first half of FY 2019 the company defied tough trading conditions by posting a 27.3% increase in net profit after tax to $32.2 million. This was driven by solid sales growth and strong gross margin improvement. I expect more of the same in the second half and FY 2020. It shares currently provide a trailing fully franked 6.2% dividend yield.
National Australia Bank Ltd (ASX: NAB)
Recent housing market data appears to show signs that house prices are close to bottoming. If this proves to be the case then a rebound could be on the cards in the near future, which is likely to lead to an increase in demand for mortgage loans. This would be a big boost to the big four banks and could support modest profit growth in the sector in FY 2020. Whilst all the big four banks are arguably in the buy zone, I think NAB is particularly attractive given its generous dividend yield. At present the banking giant's shares offer an estimated fully franked 6.2% forward yield.
Scentre Group (ASX: SCG)
Another top option for income investors could be Scentre Group. It is the real estate investment trust that owns all of the Westfield buildings in Australia and New Zealand. I think it has one of the highest quality portfolios of retail shopping centres in the region and is well-positioned for income growth thanks to its high occupancy rate and periodic rent increases. It currently offers a forward distribution yield of 6%.
