The good news for income investors in this low interest rate environment is that the Australian share market is home to a large number of shares offering generous dividend yields.
Perhaps the hardest thing is choosing which ones to buy over the others. To help you with your decision I have picked out three dividend shares which I think are great options right now.
Here’s why I would buy them:
Helloworld Travel Ltd (ASX: HLO)
I think this integrated travel company would be a good option for income investors. Helloworld was a solid performer in FY 2019 and looks set to build on this in FY 2020. It recently provided a first quarter update and revealed total transaction value growth of 10.4% and EBITDA growth of 7.7%. Pleasingly, management appears confident this can continue over the remainder of FY 2020, which I feel bodes well for its dividends. At present its shares offer a trailing fully franked 4.7% dividend.
National Australia Bank Ltd (ASX: NAB)
If you’re considering an investment in the banking sector, now could potentially be a good time to do it. Recent developments in the industry have dragged all the big four banks lower. The NAB share price, for example, is down 10% in less than two weeks. I think this is a buying opportunity, especially given its strong underlying performance in FY 2019 and its positive outlook due to its overweight exposure to SME lending. Another bonus is that this share price weakness means its shares now offer a trailing 6.35% fully franked dividend yield.
Wesfarmers Ltd (ASX: WES)
I think this conglomerate’s shares could be a good option for income investors. Especially with the housing market showing signs of improvement. This would be a big positive for Wesfarmers due to its heightened exposure to the housing market through its Bunnings, Kmart, and Target brands. A thriving housing market is likely to lead to solid demand for home-related goods and drive strong sales growth. This could lead to solid earnings growth and support further dividend increases. For now, I estimate that Wesfarmers will pay a FY 2020 dividend of $1.53 per share. This equates to a fully franked 3.6% dividend yield.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Helloworld Limited. The Motley Fool Australia owns shares of National Australia Bank Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Helloworld 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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