With record low interest rates, record low government bond yields and record high property prices right around the country, it's becoming very hard to find mainstream investments that offer generous yields on your capital.
But that's only if you're looking outside the share market. ASX dividend shares continue to offer market-leading returns through both dividend payouts and the franking credits that often come attached.
So, here are three such shares that I think offer investors a top yield on capital today.
National Australia Bank Ltd. (ASX: NAB)
NAB hasn't had the easiest two years. Compensation payments that were necessitated following the 2018 Royal Commission have been a financial albatross around the bank's neck (though a deserving one). Low interest rates also haven't helped. NAB was forced to cut its generous dividend last year and many are predicting it will be backed up again this year.
Still, today NAB shares offer a trailing dividend yield of 6.41% (which grosses-up to 9.16% with franking). Even if said dividends are trimmed this year, I still expect this payout to be one of the more substantial on the markets today – making NAB a buy in my opinion at the current price.
South32 Ltd (ASX: S32)
South32 is the younger cousin of BHP Group Ltd (ASX: BHP) that was spun-off the mining giant back in 2015. Today, it's a diversified miner with global operations in silver, manganese, aluminium, lead, nickel and coal extraction.
South32 shares are trading in the lower half of its 52-week range at the current time. At $2.55 a share (at the time of writing), it's getting close to the 52-week low of $2.36 and very far from the high of $3.99. With a trailing yield of 4.43% (6.33% grossed-up), I think it's a good time to pick up some shares of this mining giant.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the most diversified companies on the ASX. Its largest operations include the Bunnings Warehouse hardware stores, Officeworks, Target, Kmart and a 15% stake in Coles Group Ltd (ASX: COL) – but it owns and operates dozens of other businesses as well. These cover the mining, manufacturing and property sectors amongst other things.
In my view, having fingers in so many pies gives this company enormous stability and strength – something you want in a dividend payer! On current prices, Wesfarmers shares offer a trailing yield of 3.89% (which grosses-up to 5.56% with franking). The Wesfarmers share price isn't the cheapest at the moment, but that's the cost of investing in this era of record low interest rates for you!
