Luckily in this low interest rate environment, the Australian share market has a large number of shares offering attractive dividend yields.
But which dividend shares should you buy? I think the three listed below would be great options for income investors:
Aventus Group (ASX: AVN)
The first dividend share to consider buying is Aventus. This retail property company specialises in large format retail parks across Australia. Given how Aventus’ rental income has a reasonably high weighting towards everyday needs, I think it well-placed to navigate the tough trading conditions facing the retail sector. This is a view I share with Goldman Sachs, which remains very positive on the company. So much so, it has forecast a ~17.3 cents per unit distribution in FY 2021. This equates to a forward ~7.8% distribution yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
As long as the recent spike in coronavirus cases in Victoria doesn’t get out of control, I’m optimistic domestic tourism will rebound strongly over the remainder of 2020. Especially given recent reports of pent up demand for travel in Australia after months of restrictions. This could put Sydney Airport in a position to start paying a decent dividend again in FY 2021. At this point, I expect the airport operator to pay shareholders a 29 cents per share dividend next year. This represents a forward 4.9% dividend yield based on its last close price.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
If you don’t have enough funds to maintain a truly diverse portfolio of dividend shares, then you might want to consider buying the Vanguard Australian Shares High Yield ETF. This exchange traded fund provides investors with exposure to 62 of the highest yielding shares on the ASX through just a single investment. This includes the big four banks, telcos, and shares like Sydney Airport. At present I estimate that its units offer a forward dividend yield of at least 4.5%.
3 “Double Down” stocks to ride the bull market higher
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More reading
- ASX 200 finishes flat, ASX travel shares drop
- The ASX stocks worst hit by second wave COVID-19 fears
- These 5 ASX shares saw the biggest losses last week
- ASX share price winners and losers of last week
- ASX 200 Weekly Wrap: ASX back in the green
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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