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Forget term deposits and buy Coles and these ASX dividend shares

Whilst term deposits are ordinarily very useful for income investors, the interest rates on offer at moment are not even keeping up with inflation.

This means that inflation is actually eroding any funds invested in them at present. In light of this, if I were an income investor I would forget term deposits and buy one of these ASX dividend shares:

Coles Group Ltd (ASX: COL)

I think Coles would be a great option for income investors due to its defensive qualities, solid growth potential, and favourable dividend policy. In respect to the latter, the supermarket giant intends to pay out 80% to 90% of its profits to shareholders. I believe this bodes well for income investors, especially given the solid growth potential that it has thanks to its refreshed strategy and focus on automation. I estimate that its shares currently offer a forward fully franked 3.5% dividend yield.

Macquarie Group Ltd (ASX: MQG)

I think Macquarie is one of the highest quality companies that Australia has to offer. And although FY 2020 may be a softer year for the investment bank following an incredibly strong performance the previous year, I’m confident the quality and diversity of its operations leaves it well-positioned for strong earnings and dividend growth over the next decade. At present Macquarie’s shares offer a partially franked trailing dividend yield of approximately 4.5%.

Stockland Corporation Ltd (ASX: SGP)

Another dividend share I would consider buying is Stockland. It is a diversified Australian property company that owns, manages and develops retail centres, residential properties, and retirement communities. Last month Stockland released its first quarter update. That update revealed an improvement in residential sales and an increase in comparable retail MAT growth. It also advised of continued up-weighting in logistics and progress in its commercial property development pipeline. This year I expect a 27.8 cents per unit distribution, which equates to a generous forward 5.6% distribution yield.

And here are three more dividend shares that smash term deposits right now with their generous yields.

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

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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 Macquarie 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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