According to the latest Westpac Banking Corp (ASX: WBC) Weekly economic report, the bank continues to believe that the Reserve Bank will take the cash rate down to 0.5% by March of next year.
And with Australian inflation currently at 1.6%, this means that the interest rates on offer from savings accounts and term deposits are likely to be notably lower than the inflation rate in the very near future.
In light of this, I would suggest savers and income investors consider switching to dividend shares which offer inflation-busting yields.
Three to consider are as follows:
Accent Group Ltd (ASX: AX1)
Last week this footwear-focused retailer's shares surged higher after it delivered an 8.7% increase in total sales to $935.3 million and a 22.2% jump in statutory net profit after tax to a record of $53.9 million. This was driven by solid like for like sales growth and margin improvement from reduced discounting. Looking ahead, management expects more growth in FY 2020, which bodes well for its dividend. In FY 2019 the company increased its dividend by 22% to 8.25 cents per share, which equates to a fully franked 5.1% dividend yield.
Scentre Group (ASX: SCG)
Scentre is the owner of the Westfield properties in the ANZ region. Last week it released its half year results and reported a 3% increase in funds from operations (FFO) and a 5% increase in earnings. This was driven partly by strong demand for its properties which led to a sky-high occupancy rate of 99.3%. More of the same is expected in the second half, with management forecasting FFO per security growth of approximately 3%. It also provided guidance for a final distribution of 11.3 cents per security, which equates to a 5.7% yield on an annualised basis.
Transurban Group (ASX: TCL)
One of my favourite dividend shares is this toll road operator. Once again Transurban was a strong performer in FY 2019, reporting a 12.3% increase in proportional EBITDA excluding significant items to $2,016 million. The good news is that management remains positive on its outlook and further solid growth looks likely in FY 2020. As a result, the company plans to increase its distribution by 5.1% to 62 cents per security. This equates to a forward 4.15% distribution yield.
