If you're looking for a source of income in this low interest rate environment, then the three dividend shares listed below could be great options.
I believe all three would be great additions to a balanced portfolio. Here's why I would buy them:
Coles Group Ltd (ASX: COL)
One of my favourite dividend shares is Coles. I believe the supermarket operator is well-positioned to grow its dividend at a solid rate over the next decade. This is thanks to its defensive earnings, refreshed strategy, expansion opportunities, and its investment in automation. Combined with its long track record of same store sales growth, I believe the future is bright for Coles. At present I estimate that its shares offer a fully franked 4% FY 2021 dividend.
Transurban Group (ASX: TCL)
Income investors that can afford to be patient might want to consider buying this toll road operator's shares. It may have experienced a very sharp reduction in traffic volumes on its roads during the pandemic, but I expect traffic to rebound as restrictions ease. And while I suspect that a final distribution may not be forthcoming, I believe the payments will start flowing again in FY 2021. I expect a 45 cents per unit distribution next year, before an increase to previous levels in FY 2022. The former implies a forward 3.1% distribution yield.
VanEck Vectors Australian Banks ETF (ASX: MVB)
If you're wanting to invest in the banking sector but aren't sure which bank to buy ahead of others, then the VanEck Vectors Australian Banks ETF could be a great option. This is because this exchange traded fund lets you buy a slice of the big four banks through just a single investment. It also provides investors with exposure to the regional banks and investment bank Macquarie Group Ltd (ASX: MQG). I estimate that its units currently provide a yield of at least 5%.
