The Australian share market is one of the most income-friendly markets in the world, which certainly is a big positive given the low interest rate environment that we are living in today.
Among the good number of options that income investors have, three of my favourites are listed below. Here's why I would buy them:
Scentre Group (ASX: SCG)
Scentre Group is the owner of all the Westfield properties in the ANZ region. As these properties are amongst the highest quality retail assets in the region and have millions of visitors each year, demand for them continues to be strong and has led to Scentre enjoying a sky high occupancy rate. In light of this, I continue to believe Scentre is well-placed to continue growing its income and distribution at a steady rate over the next few years. At present its units offer a trailing 5.6% distribution yield.
Telstra Corporation Ltd (ASX: TLS)
Although it has been a tough couple of years for this telco giant, with the end of the nbn pain finally in sight and rational competition returning to the telco industry, I believe its long term outlook is the best it has been in years and suspect that a return to growth isn't too far away. Another positive is that thanks to its solid free cash flow, I remain confident that its dividend is now at a sustainable level and there will be no more cuts. At present Telstra's shares offer investors a fully franked 4.5% dividend yield.
Westpac Banking Corp (ASX: WBC)
If you don't have exposure to the banking sector then I think it could be worth considering an investment in Westpac's shares. Although the banks have rallied strongly this month thanks to positive signals emerging from the housing market, its shares still provide one of the more generous dividend yields on the local share market. At present Westpac's shares offer a trailing fully franked 6.3% dividend yield.
