With an average dividend yield of approximately 4%, the ASX is one of the most generous share markets in the world.
This certainly is a blessing given the ultra-low rates that are on offer from other interest-bearing assets.
But which dividend shares should you buy? I think the shares listed below would be great options for income investors:
National Australia Bank Ltd (ASX: NAB)
This banking giant could be a good option for income investors. Its shares have come under significant pressure over the last few months, leading to them falling over 15% from their 52-week high. I think this selling has been overdone and has created a buying opportunity for investors. And while trading conditions remain tough, I’m optimistic the improving housing market will boost its performance in the near future. Even after factoring in a probable dividend cut in FY 2020, I estimate that NAB’s shares offer a forward fully franked 6.3% dividend yield.
Transurban Group (ASX: TCL)
I think that Transurban would be a great option for income investors. It owns and operates the largest network of toll roads in Australia and also owns roads in North America. Due to increasing congestion in cities and the time-savings on offer, more and more vehicles are using its roads. And with congestion likely to worsen over the next decade due to population growth, Transurban is in a very good position to benefit from a combination of increasing users and rising toll prices. Combined with expansions and acquisitions, this should support solid distribution growth in the coming years. Transurban’s shares offer a forward 4% distribution yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Another top dividend share to consider is Sydney Airport. It is the owner and operator of Australia’s largest and busiest airport. Its position as the main gateway into the country means it has been benefiting greatly from the increasing number of international visitors. The good news is that I expect this trend to continue over the next decade. Which, supported by improving domestic tourism and its growing ancillary revenues, should help drive solid income and dividend growth in the future. At presents its shares offer a 4.3% dividend 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 Sydney Airport Holdings Limited and Transurban Group. The Motley Fool Australia owns shares of National Australia Bank 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.