Although current cash rate futures imply that there is only an 11% chance of a rate cut at the Reserve Bank’s meeting next month, I don’t think it will be long before the cash rate is taken below 1%.
So, if you haven’t already done so, I would suggest you consider switching from term deposits into dividend shares that offer far greater yields.
Three that I would suggest you look closer at are listed below:
Aventus Group (ASX: AVN)
On Wednesday this leading owner and operator of large format retail parks across Australia reported its full year results and revealed funds from operations (FFO) of $96 million or 18.4 cents per security. This compares to $89 million and 18.1 cents per security in the prior corresponding period. A key driver of this growth was its high occupancy rate and like-for-like net operating income growth of 3.5%. As a result of its strong form, the company declared distributions of 16.6 cents per security for the year. Based on its FY 2020 FFO per security growth guidance of 3% to 4%, I estimate that its shares offer a 6.6% forward distribution yield.
Lendlease Group (ASX: LLC)
Another dividend share to consider buying is this international property and infrastructure company. I think investors ought to look past its 41% decline in profit in FY 2019 and focus on its improving outlook. Especially given its plan to sell its troubled engineering division and its record pipeline of development projects. Another positive is the ~$20 billion multi-year project with tech giant Google in the United States which I expect to underpin solid earnings growth over the next decade. At present I estimate that its shares offer a fully franked 4% FY 2020 dividend yield.
Westpac Banking Corp (ASX: WBC)
One of my favourite options in the banking sector is Westpac. This is due to its attractive valuation and very generous dividend yield. And while trading conditions continue to be tough in the sector, I am optimistic that things will improve in the near term due to improvements in the housing market. A rebound in house prices could lead to solid mortgage loan growth and support modest earnings and dividend growth over the coming years. At present its shares offer a trailing fully franked 6.8% dividend yield.
But Westpac is the number one rated bank to buy right now, this one is.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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.