With an average dividend yield of approximately 4%, income investors certainly have a lot to choose from on the Australian share market.
Which is great news considering the weak outlook for interest rates in Australia this year.
Three high yield dividend shares that I would buy today are listed below. Here's why I like them:
BHP Billiton Limited (ASX: BHP)
Although this mining giant's shares have now recovered after an initial post-earnings decline, I still think they are great value and a quality option for income investors. BHP may have delivered profit growth slightly below expectations, but its dividend increase was well ahead of the market's forecasts. Which means that its shares now provide a trailing fully franked 3.9% dividend. And considering the positive outlook for the global economy, I wouldn't be at all surprised to see this dividend increase further come its full-year results release in August.
Telstra Corporation Ltd (ASX: TLS)
While Telstra's half-year results were less than spectacular, they left me feeling confident that the telco giant can maintain its 22 cents per share dividend for at least the next couple of years. After which, a lot will depend on the success of its investments, cost cutting program, and the impact that 5G internet has on its business. I am optimistic that 5G will revolutionise the internet in the country and even make the NBN close to redundant. In fact, I thought it was interesting that Telstra's new modems now come with a SIM slot allowing for internet connectivity through its mobile network. Perhaps this is a sign of the future. At present Telstra's shares provide a forward fully franked 6.3% dividend.
Westpac Banking Corp (ASX: WBC)
I think recent price weakness in bank shares has opened up an opportunity for income investors to pick up some at a decent level. Although all the banks could be buys right now, my pick of the group remains Westpac. This is due to my belief that its shares provide the perfect mix of both value and income right now. As of yesterday's close price, the shares of Australia's oldest bank offer investors a generous trailing fully franked 6% dividend.
