As interest rates are at record lows and showing no signs of increasing in the near future, I don't believe there is much incentive in keeping cash in high interest savings accounts.
Instead I would suggest investors put those funds to work in the share market. After all, with an average dividend yield of 4.3%, there certainly are a lot of options for investors.
Three dividend shares which I would consider today are as follows:
With the G8 Education Ltd (ASX: GEM) share price down around 12% in the last 30 days, its shares now provide investors with a trailing fully franked 6.6% annual dividend paid quarterly. Although its falling occupancy levels is a concern, with childcare demand expected to rise strongly I'm optimistic that things will improve greatly in FY 2017. In the long-term the company has its eyes firmly on the lucrative China market. If G8 Education is able to make a success of its proposed expansion into China, there certainly would be significant room for its dividend to grow over the next decade.
The Retail Food Group Limited (ASX: RFG) share price has not had a great start to 2017 and finds itself lower by a massive 27%. Although I'm not a big fan of all of its brands, I believe its coffee businesses are what makes it a buy today. The strong performance of its Coffee Retail segment was a key reason Retail Food Group delivered half-year net profit growth of 12.7%. The good news is that the company sees significant room for the businesses to grow internationally, which I believe should result in solid earnings growth over the next few years. This should allow it to continue to grow its dividend, which currently provides a trailing fully franked 5.7% yield.
The Telstra Corporation Ltd (ASX: TLS) share price has been hammered in the last few months, falling a whopping 20% year-to-date. Concerns over TPG Telecom Ltd (ASX: TPM) launching its own mobile network and stealing market share from the telco giant appear to be behind the decline. Although I feel Telstra will inevitably be impacted, I think fellow telcos Optus and Vodafone are likely to suffer the most. All in all, I feel the sell-off may have been a bit of an overreaction. So with Telstra providing a trailing fully franked 7.5% dividend, I think it could be a great option for income investors today.
