Because of all the deferments and cancellations, estimating the average dividend yield of the Australian share market is tricky at the moment.
However, traditionally, the local share market would provide investors with an average yield of approximately 4% each year. And while this is very attractive in comparison to term deposits, you don't have to settle for that.
Listed below are two top dividend shares which offer investors higher than normal yields. Here's why I would buy them for income this week:
Rio Tinto Limited (ASX: RIO)
I think this mining giant would be a good option for income investors right now. Thanks to its strong balance sheet, sky high iron ore prices, improving copper prices, and its world class and low cost operations, I believe Rio Tinto is likely to return high levels of free cash flow to shareholders in FY 2020 and FY 2021.
At present, I conservatively estimate that the company's shares offer a forward fully franked dividend yield of at least 5%. But it is worth noting that some analysts are even more bullish and are forecasting much greater dividends.
Rural Funds Group (ASX: RFF)
A second high yield ASX dividend share to consider buying right now is Rural Funds. It is a real estate property trust which owns a portfolio of agricultural assets across Australia. I'm a big fan of the company due to its high quality and diverse portfolio of assets and their ultra-long tenancy agreements.
The latter agreements also include rental indexation, which is underpinning consistent rental income and distribution growth. For example, next year Rural Funds has already provided guidance for a 4% increase in its distribution. This will bring its distribution to 11.28 cents per unit, which equates to a very generous forward 5.8% distribution yield.
