If you’re struggling to earn a sufficient income in this low interest rate environment, then I feel the share market could be just what you need.
This is because the Australian share market currently has an average dividend yield of ~3.8%, which is vastly superior to the yields on offer with savings accounts or term deposits.
But which shares should you buy? My money would be going on one of these quality ASX dividend shares:
Aventus Group (ASX: AVN)
Aventus is the largest fully integrated owner, manager and developer of large format retail centres in Australia. I think it is a good option for income investors due to its generous yield and positive outlook. Thanks to a record number of leasing deals due to robust demand from many of Australia’s biggest retailers, Aventus is benefiting from a sky high occupancy rate. As a result, management expects to deliver a 3% lift in its distribution to 17.1 cents per unit in FY 2020. This equates to a 5.9% distribution yield.
Coles Group Ltd (ASX: COL)
I think this supermarket operator could be a good option for investors. Trading conditions in the supermarket industry have been improving meaningfully in recent months. This is thanks to rational competition, food inflation, and the surprise exit of Kaufland from the Australian market. Combined with its refreshed strategy and focus on automation, I believe Coles’ long term outlook is very positive. Overall, I expect this to support solid earnings and dividend growth over the next decade. Based on its current dividend policy, I estimate that Coles’ shares provide a forward fully franked 3.4% dividend yield.
National Storage REIT (ASX: NSR)
Another option for income investors to consider buying is National Storage. It is one of the leading self-storage providers in the ANZ region. Thanks to a combination of organic growth, development projects, and its growth through acquisition strategy, National Storage has been growing its income and distribution at a solid rate over the last few years. This is despite the housing market downturn. Pleasingly, with the housing market rebounding strongly, I believe demand for its services will increase over the coming years as more and more people move houses. I feel this bodes well for its income and distribution growth. At present I estimate that its units offer a forward distribution yield of 4.6%.
5 stocks under $5
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And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT and National Storage REIT. 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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