If you’re looking for a source of income in this low interest rate environment, then I think the dividend shares listed below could be quality options.
Here’s why I think income investors ought to consider buying them:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
I think ANZ would be worth considering right now. At around 13x estimated FY 2021 earnings and 0.9% FY 2021 book value, I think the banking giant’s shares are trading at a very attractive level. Especially for income investors. I expect the bank to pay a partially franked dividend of $1.05 per share in FY 2021. If this proves accurate, it means that ANZ’s shares currently offer investors a very generous 5.5% yield at present.
SPDR S&P/ASX 200 Fund (ASX: STW)
This exchange traded fund (ETF) gives investors exposure to all of the 200 companies listed on the S&P/ASX 200 Index (ASX: XJO) through just a single investment. This diverse group of shares includes the likes of the big four banks, mining giants, and countless REITs. While predicting what the yield will be in FY 2021 is difficult because of dividend deferrals and cuts, traditionally it is around 4% to 4.5%. I think this makes it a good option for income investors that don’t have enough funds to maintain a truly diverse portfolio.
Wesfarmers Ltd (ASX: WES)
Another top dividend share to consider buying is this conglomerate. I’m a big fan of the conglomerate due to the quality and diversity of its portfolio of businesses. I feel the majority of these businesses are well-positioned to deliver solid long term earnings growth. Combined with potential earnings accretive acquisitions in the near term, I think Wesfarmers could grow its dividend materially over the next decade. For now, I estimate that its shares offer investors a fully franked ~3.6% FY 2021 dividend yield.
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More reading
- Why Morgans is urging investors to buy ASX big bank stocks today
- Here are 3 Australian share market trends to watch this week
- ASX share price winners and losers of last week
- ASX 200 Weekly Wrap: ASX back in the green
- Which shares to buy if the ASX tumbles
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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.
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