On Wednesday the Reserve Bank of New Zealand surprised everyone by slashing its cash rate by 50 basis points to 1%.
It also warned that it "remains within the remit of monetary policy to do whatever it takes to meet our mandate with our tool set."
I believe it is only a matter of time before both the RBNZ and the RBA take their respective cash rates below the 1% mark.
This will almost certainly lead to the banks slashing the interest rates on savings accounts and term deposits to levels that struggle to keep up with inflation.
In light of this, I continue to believe savers would be better off looking to the share market for their income needs, especially given the generous dividend yields on offer right now.
Three dividend shares which I believe are well-placed to grow their payouts in the coming years are listed below:
National Storage REIT (ASX: NSR)
National Storage is one of the largest self-storage providers in the ANZ market. Thanks to solid demand for its services and developments and acquisitions, I believe it is well-placed to grow its distribution at a decent rate over the next few years. At present its shares offer a forward yield of around 5.5%.
Super Retail Group Ltd (ASX: SUL)
Super Retail Group is the name behind automotive retailer Supercheap Auto, sports store Rebel, and adventure retailers BCF and Macpac. It has delivered solid profit growth this year despite tough trading conditions in the retail sector. With conditions likely to improve in FY 2020 thanks to tax cuts and the improving housing market, I believe its earnings and dividend could continue to grow. At present its shares offer a trailing fully franked 5.8% dividend yield.
Transurban Group (ASX: TCL)
This toll road operator has just announced its full year results, a $700 million equity raising, and its distribution guidance of 62 cents per security for FY 2020. The funds that the company is raising will be used to purchase the remaining interests in M5 West. This is expected to be immediately free cash flow and value accretive and should support its long-term growth. The FY 2020 distribution guidance equates to a 4.1% yield.
