The Reserve Bank of Australia initiated two rate cuts across June and July, leaving interest rates at record lows of 1%. As interest rates are expected to go lower, investors are forced to turn to the equity markets for more meaningful returns.
When it comes to buying stocks for income, many offer a deceivingly high yield but come at a cost in a sliding share price weeks or months down the track. Here are 4 reliable ASX dividend stocks that have healthy fundamentals and dividend yields.
WAM Capital Ltd (ASX: WAM)
WAM Capital is a listed investment company managed by Wilson Asset Management. The fund provides investors exposure to an actively managed diversified portfolio of undervalued growth companies.
WAM has had a strong track record of dividend growth and currently pays a grossed-up dividend yield of 10.1%. In the company's June 2019 investment update, it highlighted some strong winners in its portfolio including Codan Limited (ASX: CDA) and Ausdrill Ltd (ASX: ASL). WAM should provide investors with some exposure to the current bullish markets with an incredibly generous dividend.
Vicinity Centres (ASX: VCX)
A research note out of Goldman Sachs has upgraded Vicinity to a buy with a target price of $2.76. Goldman Sachs cites that the Vicinity share price is attractive relative to its Australian Real Estate Investment Trust (A-REIT) peers, trading at a 13% discount to its net tangible assets. Alongside a solid 6.2% dividend yield, Vicinity should offer some upside within the current low interest rate climate.
Sydney Airport Holdings Ltd. (ASX: SYD)
Sydney Airport is a market darling when it comes to dividends and currently offers a 4.6% dividend yield. It has the status of being one of the most reliable and consistent stocks across its growth metrics and dividends. This trend is likely to continue as Sydney Airport has the room to expand its "destinations currently served" to include destinations in Europe, far-east America and South America. The company has also proposed a Sydney Gateway road project that is set to deliver enhanced connections and reduced travel times by 2023.
Coles Group Ltd (ASX: COL)
Coles is expected to make its first dividend payment in the coming months since its demerger back in November 2018. While no hard figure has been announced by the company, it has stated that it aims to maintain an 80–90% target dividend payout ratio. The Coles share price has been bullish in recent times as it aims to restore profit growth by 2021 by slashing costs by $1 billion over four years, while putting the brakes on new stores to focus on its online, convenience, health foods and export businesses.
