At present the Australian share market has an average dividend yield of approximately 4%.
This makes it one of the most generous share markets in the world, which certainly is good news for income investors in this low interest rate environment.
But with so many dividend shares to choose from, it can be hard to decide which ones to buy.
To narrow things down I've picked out three of my current favourites. They are as follows:
Accent Group Ltd (ASX: AX1)
I think one of the best options in the retail sector right now is this footwear-focused retail group. Although trading conditions in the sector have been tough, it hasn't stopped Accent from delivering strong profit growth again in FY 2019. In the first half the company delivered an impressive 27.3% increase in net profit after tax to $32.2 million thanks to a combination of strong digital sales growth and margin improvement. Pleasingly, management expects a solid second half with EBITDA growth of at least 10%, which I believe should put the board in a position to increase its dividend again. At present its shares offer a trailing fully franked 5.6% dividend yield.
Aventus Retail Property Fund (ASX: AVN)
Another top dividend share to consider buying this month is Aventus Retail Property Fund. It is a fully integrated owner, manager, and developer of large format retail centres (retail parks) throughout Australia. As the property fund counts many of the biggest retailers in the country as tenants, I believe there is little risk of rent defaults and closures. I expect this to allow Aventus to continue growing its funds from operations and distributions over the coming years. Its units currently offer a trailing 7.2% yield.
Coles Group Ltd (ASX: COL)
One of my favourite income shares on the Australian share market is this supermarket giant. With the company intent on paying out between 80% and 90% of its earnings as dividends, I believe it is a great long-term option for income investors. Especially given its solid growth prospects thanks to its focus on automation. Whilst this will take considerable investment, it is expected to result in a material improvement in its margins. I estimate that its shares currently offer investors a fully franked forward 4.8% dividend.
