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3 ASX dividend shares that smash low interest rates

Based on current cash rate futures, the market continues to expect the Reserve Bank to cut rates again very soon.

As you can see on the chart below, the expectation is for a cut to 0.5% by February.

Source: ASX

After which, there appears to be a 50:50 chance that rates will be taken even lower in mid-2020.

In light of this, it looks as though the interest rates on offer from savings accounts and term deposits are going to come under further pressure in the next 12 months.

As a result, if you haven’t done so already, I would consider switching out of them and into dividend shares.

Three dividend shares I think are great options are listed below. Here’s why I like them:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust which generates the majority of its income as the landlord of hardware giant Bunnings. I’m a fan of BWP because I believe it is well-positioned to grow its dividend over the coming years. This is due to the quality of its tenants and periodic rental increases. At present its shares provide a trailing 3.6% distribution. Whilst this isn’t the biggest yield on the market, I expect it to grow at a solid rate over the next decade.

Stockland Corporation Ltd (ASX: SGP)

Another option for income investors is this diversified Australian property group. Stockland owns, manages and develops retail centres, workplace and logistics assets, residential and retirement communities. This year the market has forecast a small increase in its distribution to 27.8 cents per unit, which equates to a forward 6.1% distribution yield.

Transurban Group (ASX: TCL)

A final option to consider is Transurban. The toll road giant continues to be one of my favourite dividend shares due to the quality of its assets, their strong pricing power, and recent acquisitions and developments. This year management plans to increase its distribution to 62 cents per security, which equates to a forward 4.15% forward yield.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Transurban Group. 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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