According to the latest ASX 30 Day Interbank Cash Rate Futures, the market has priced in a 25% chance of a rate cut by the Reserve Bank of Australia at next week's August meeting.
Whilst this means a rate cut next month is reasonably unlikely, I think it is inevitable that at least one will be made before the end of the year.
As a result, I continue to believe that dividend shares are the best way to generate an income in this low interest rate environment.
Three top dividend shares that I would buy are listed below. Here's why I like them:
Aventus Group (ASX: AVN)
Aventus is a leading owner and operator of large format retail parks across Australia. Thanks to its high occupancy rates and rental increases, I believe the company is in a strong position to continue growing its distribution over the coming years. At present its units provide a trailing 6.8% distribution yield.
Australia and New Zealand Banking Group (ASX: ANZ)
With the housing market tipped to rebound in 2020 and tax cuts expected to increase consumer sentiment, I believe ANZ could benefit from increased demand for mortgage loans in the near term. If this occurs it should give ANZ's bottom line a boost. Furthermore, I think its attractive valuation, above-average dividend yield, cost-cutting opportunities, and share buybacks make it the pick of the big four. ANZ's shares currently offer a trailing fully franked 5.8% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Its shares may have just reached a 52-week high, but I think this telco giant would still be a great option for income investors. This is because of its material cost cutting opportunities and the improving outlook of the telco industry thanks to the return of rational competition and the launch of 5G. Overall, I expect this to lead to Telstra returning to earnings growth from potentially as soon as FY 2020. At present its shares offer an estimated forward fully franked 4.1% dividend yield.
