While I think that the big four banks are top options for income investors right now, not everyone is a fan of them.
So, if you’re looking for dividends outside the banking sector, then the two shares listed below might be the ones to buy:
Aventus Group (ASX: AVN)
The first share that I think could be a good alternative to the big four banks is Aventus. It is a retail property company which specialises in large format retail centres (retail parks) across Australia. At the last count, the company had a total of 20 centres in its portfolio. These centres are home to a diverse tenant base of 593 quality tenancies. This includes many of the largest retailers in the country such as ALDI, Bunnings, Officeworks, The Good Guys, and Super Cheap Auto.
Pleasingly, its portfolio has a high weighting towards everyday needs, which I believe leaves it better positioned than most to ride out the current crisis. One broker that is particularly positive on Aventus is Goldman Sachs. It recently forecast a ~17.3 cents per unit distribution in FY 2021. This equates to a massive forward ~8.2% distribution yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
If you don’t mind waiting until FY 2021 for dividends, then I think Sydney Airport could be a great option. While the airport operator could still pay a heavily reduced final dividend, I would suggest investors turn their attention to the future.
Although it will take time for travel markets to recover in full, I’m optimistic the domestic travel market will be strong enough to allow the company to pay a 29 cents per share dividend in FY 2021. If this estimate proves accurate, it will mean a 5.2% dividend yield next year. I think this makes it well worth considering a patient investment in its shares.
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Returns As of 6th October 2020
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