It is becoming harder and harder to generate a sufficient income using traditional income-generating assets like term deposits.
For example, at present the 24-month term deposits on offer from Australia and New Zealand Banking Group (ASX: ANZ) come with interest rates of just 1.15%. This is lower than the current inflation rate.
The good news is that there are a large number of shares on the ASX that offer dividend yields which smash term deposits.
Here are three that I would buy:
Macquarie Group Ltd (ASX: MQG)
I'm a big fan of Macquarie and feel it could be a great option for income investors. One reason I like the investment bank is that it earns its money from a diverse range of revenue streams. This means it can continue to thrive even when the big four are struggling with tough trading conditions. In light of this, I think it is a great alternative to the big four banks. At present Macquarie's shares offer income investors a partially franked 4.1% dividend yield.
Scentre Group (ASX: SCG)
This owner and operator of Westfield shopping centres in the ANZ market has come under pressure this week due to concerns over the closure of a number of retailers this month. However, this is reasonably normal in January and is only a tiny fraction of its 16,000+ tenancies. Furthermore, other growing retailers continue to expand their footprint and should offset some of these closures. Overall, I would be a buyer of its shares if I were an income investor. At present its units offer a trailing 5.7% distribution yield.
Transurban Group (ASX: TCL)
One of my favourite dividend shares on the Australian share market is Transurban. I'm a big fan of the toll road operator due to its world class portfolio of toll roads and the strong pricing power they have. And with congestion on arterial roads getting worse each year, I expect this to lead to a growing numbers of vehicles using its toll roads for years to come. This should support solid income and distribution growth over the next decade. At present Transurban's shares offer a forward 3.9% distribution yield.
