It is looking increasingly likely that the Reserve Bank of Australia will be cutting the cash rate at least one more time before the end of the year.
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. In fact, 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:
Rural Funds Group (ASX: RFF)
Rural Funds owns a portfolio of diversified agricultural assets which include poultry farms, cattle production, premium vineyards, and almond and macadamia orchards. I believe it is well-placed to generate solid total returns for investors over the next decade due to the quality of its assets and tenants, its long-term leases, and periodic rental increases. At present, its units offer investors a 4.5% forward distribution yield.
Super Retail Group Ltd (ASX: SUL)
Another share which I think could provide above-average total returns for investors is Super Retail Group. The company behind automotive retailer Supercheap Auto, sports store Rebel, and adventure retailers BCF and Macpac has delivered solid growth this year despite tough retail conditions. The good news is that I think FY 2020 could be an even stronger year if a housing market rebound and tax cuts lead to a big improvement in consumer confidence and spending. At present its shares offer a trailing fully franked 5.4% dividend yield.
Transurban Group (ASX: TCL)
Finally, I think this toll road operator could also be a great option in this low interest rate environment. This is because I believe Transurban is well-placed to grow its income and distribution at a strong rate over the next decade thanks to its monopolistic assets that generate very strong and reliable levels of cashflow. Furthermore, recent acquisitions and development projects could also support its growth over the coming years. At present the company's shares offer investors an estimated forward 4% distribution yield.
