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Why I would buy this banking share and these ASX dividend stars

With the banks slashing the interest rates on their savings accounts and term deposits, it is getting harder and harder to generate an income that comfortably beats inflation.

In light of this, I think savers should look to the share market for their income needs due to the high quality dividend shares on offer.

Three dividend shares that I would buy next week are listed below:

National Australia Bank Ltd (ASX: NAB)

One of my favourite options in the banking sector right now is NAB. I think it would be a great option for income investors due to its attractive valuation, generous dividend yield, and improving outlook. This is especially the case given the housing market has been improving and is tipped to rebound in FY 2020. This could lead to solid mortgage loan growth and support its earnings and dividends. I estimate that NAB’s shares offer a forward fully franked 6.1% dividend yield.

Scentre Group (ASX: SCG)

Scentre Group is the owner and operator of Westfield buildings in the Australia and New Zealand region. Thanks to the increasingly popularity of its world class centres, Scentre Group has experienced strong demand for its leases. This has led to the company reporting a 99.3% occupancy rate so far in FY 2019. And with customer visits increasing to 535 million on an annual basis, I expect this to remain the case for some time to come. Combined with rent increases, I believe the company is well-placed to grow its distribution quicker than inflation over the coming years. This year the company intends to pay a distribution of 22.6 cents per share, which equates to a forward 5.8% distribution yield.

Transurban Group (ASX: TCL)

Another dividend share to consider buying next week is Transurban. It is one of the world’s largest toll road operators with a growing network of roads across the east coast of Australia and North America. Thanks to increasing car volumes, expansion projects, acquisitions, and toll increases, I believe Transurban is positioned perfectly to continue growing its distribution at a solid rate over the next decade. At present Transurban’s shares offer a trailing distribution yield of 3.9%.

Is NAB the best in the sector to own right now? This expert analyst just named the best bank share to buy

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Transurban Group. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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