According to ASX cash rate futures the market is currently pricing in a 64% chance of the Reserve Bank cutting rates to 1.5% at next week's meeting. Some economists are predicting that this will be the first of two further cuts this year, ultimately bringing the cash rate down to a low of just 1.25%.
With rates at these record low levels I believe investors in search of income should take a look at some high-yield dividend shares that the ASX has to offer. Listed below are three shares which I believe are great income investments:
G8 Education Ltd (ASX: GEM)
For FY 2017 the childcare operator is expected to pay an estimated fully franked 6.8% dividend, paid quarterly. Thanks to its successful growth through acquisition strategy G8 Education has been able to deliver strong earnings growth over recent years. This has led to six consecutive years of dividend increases, with this year looking to be a similar story. I believe there is a lot of steady growth ahead for the company which makes it a great long-term investment. Management believes there is an addressable market of 4,000 centres. With the company operating 471 centres in Australia and 18 in Singapore, its growth through acquisition strategy still has further to go in my opinion.
Hotel Property Investments Ltd (ASX: HPI)
Hotel Property Investments owns 44 investment properties predominantly in Queensland. As the company's name implies these properties are hotels/pubs, and currently boast 100% occupancy rates. With 43 of these properties leased to Wesfarmers Ltd (ASX: WES) via Coles, I feel it is fair to say that the risk of non-payment of rent is extremely low. In the last few years rent has increased by an average of 3.9%, which has helped create steady and predictable earnings growth. Because of this I believe it makes Hotel Property Investments a great addition to retirement portfolios. According to CommSec, analysts expect its shares to provide an unfranked 6.1% dividend in FY 2017.
Telstra Corporation Ltd (ASX: TLS)
If the telecommunications giant isn't already in your portfolio then now might be a great time to add it. In the last 12 months Telstra's shares have declined by around 11% and are now forecast to provide a fully franked 5.7% dividend in FY 2017. Due to its size Telstra will always struggle to match the growth rates of of many of its telco rivals, but I still believe it can grow its earnings and dividend at a steady rate. This is thanks to its strong core businesses, its promising Asia-Pacific business, and its expanding presence in the healthcare sector.
