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Why I would buy Westpac and these ASX dividend shares this week

With rates at ultra-low levels and likely to go lower in the near future, it is a great time to be a borrower.

Unfortunately, the same cannot be said for savers, who will be lucky to beat inflation given the paltry interest rates being offered by the banks.

In light of this, I continue to believe that the share market is the best option for income investors right now.

Here are three quality dividend shares to consider:

Super Retail Group Ltd (ASX: SUL)

Super Retail is the retail group behind brands including Macpac, Rebel and Super Cheap Auto. It was able to overcome tough trading conditions in the retail sector in FY 2019 to deliver a solid 7% increase in profit. This allowed the company to increase its dividend to 50 cents per share fully franked, which equates to a 5.5% dividend yield. Pleasingly, management advised that it has had a positive start to FY 2020. This could mean another year of solid growth for the company’s earnings and dividend.

Transurban Group (ASX: TCL)

I think that this toll road giant could be a great long-term option for income investors due to the quality of its assets, its strong pricing power, and long track record of distribution increases. It was a very strong performer in FY 2019 and looks set to repeat this in the current financial year. Management advised that in FY 2020 the board intends to increase its distribution by 5.1% to 62 cents per security. This equates to a forward 4.2% forward yield.

Westpac Banking Corp (ASX: WBC)

Another dividend share to consider buying is Westpac. Although trading conditions continue to be tough in the banking sector, I remain optimistic that things will improve greatly in the near term thanks to recent moves by APRA to loosen lending rules and a potential rebound in the housing market. This could potentially put Westpac in a position to deliver modest earnings and dividend growth over the coming years from as soon as FY 2020. At present its shares offer a trailing fully franked 6.6% dividend yield.

But if you're not keen on the banks then check out these quality dividend stocks which have been rated as buys.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Transurban Group. The Motley Fool Australia owns shares of Super Retail Group Limited. 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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