It looks quite likely that interest rates will be taken lower again in 2020.
Whilst this will be great news for borrowers, it won’t be for savers and income investors.
But don’t worry if you’re in the latter group, because these ASX dividend shares are here to save the day. Here’s why I would buy them:
Aventus Group (ASX: AVN)
Aventus is a fully integrated owner, manager, and developer of retail parks in the Australian market. It owns 20 centres which are home to major retailers including the likes of Chemist Warehouse, The Good Guys, Officeworks, and Bunnings. Due to the solid demand for its tenancies, Aventus appears well-placed to deliver modest income and distribution growth over the coming years. At present, I estimate that its shares offer a forward 5.9% distribution yield.
National Storage REIT (ASX: NSR)
National Storage is one of the largest self-storage providers in Australia and New Zealand. It owns 168 centres and provides tailored storage solutions to over 60,000 residential and commercial customers from them. In FY 2019 the company was on form despite challenging economic conditions. So with the housing market now rebounding, I expect trading conditions to improve greatly in 2020 and beyond. This year the company expects to deliver underlying earnings per security growth of greater than 4%. Its units currently offer a generous distribution yield of 5%.
Scentre Group (ASX: SCG)
Scentre Group is the property company behind the Westfield shopping centres in the ANZ market. As of the end of September, it had recorded over 535 million customer visits on a 12 months basis. This has resulted in strong demand for tenancies from retailers, leading to 99.3% of its portfolio being leased. Given the popularity of its centres with consumers, I’m confident this trend will continue for the foreseeable future. This should put Scentre in a good position to grow its distribution at a modest rate in the coming years. At present its units offer a trailing 5.8% distribution yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
This airport operator welcomed 21.6 million passengers through its gates during the first half of FY 2019. Whilst this was a slight decline on the prior corresponding period due to weaker domestic passenger numbers, it didn’t stop it from delivering a 3.4% increase in revenue. So with domestic passenger numbers improving since the election and international tourism remaining strong, I believe it is well-placed for growth in the coming years. This year Sydney Airport intends to pay a 39 cents per share dividend, which equates to a 4.3% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Times have been hard for Telstra over the last few years, but things are starting to look up for the telco giant at long last. This is thanks to the early success of its T22 strategy, the return of rational competition in the telco sector, and the NBN rollout progress. Overall I think this has positioned Telstra for a return to growth in the coming years. In the meantime, though, I remain confident its 16 cents per share fully franked dividend is sustainable from its current cash flows. This equates to a fully franked 4.4% dividend yield.
These 3 stocks could be the next big movers in 2020
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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 Sydney Airport Holdings Limited and Telstra Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT, National Storage REIT, and Scentre 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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