3 high yield ASX dividend shares for income investors

Investor holding money bags of shares and dividends

The most recent Westpac Banking Corp (ASX: WBC) economic report reveals that the bank’s chief economist, Bill Evans, continues to believe the Reserve Bank of Australia will cut rates twice more in 2019 due to low inflation.

He said: “…it will be difficult to retain the 1.75% underlying inflation forecast for 2019 by August when, as we expect, the June quarter underlying CPI will print 0.4% for a total of 0.7% for the first half of the year. We think it will be important that when the RBA addresses these lower forecasts, it responds with a further rate cut in August and another one to follow in November.”

Doing so would bring the cash rate down to a lowly 0.75% and put a lot of pressure on the interest rates offered with term deposits and savings accounts.

In light of this, if you’re an income seeker, I think now would be a great time to consider investing in one of the many high yield dividend shares that the ASX has to offer.

Three that I would buy next week are listed below:

Australia and New Zealand Banking Group (ASX: ANZ)

Due to their generous dividend yields, I think investing in the shares of the big four banks would be better than putting the funds into one of their savings accounts or term deposits. Whilst all of the big four banks are arguably in the buy zone, my preference continues to be ANZ. This is due to the belief that the banking giant will be able to grow its underlying earnings per share at a modest rate over the medium term thanks to its strong capital position, share buybacks, cost cutting opportunities, and a potential rebound in the housing market in the near future. At present ANZ’s shares provide a trailing fully franked 5.7% dividend yield.

Super Retail Group Ltd (ASX: SUL)

Super Retail is the company behind retail brands such as Macpac, Rebel, and Supercheap Auto. It has been a solid performer in FY 2019 and has grown its earnings strongly despite weakness in the retail sector. And although its shares have oushed notably higher because of this, they still offer a generous trailing fully franked 5.1% dividend yield. Furthermore, one broker that believes its shares can still go higher is Goldman Sachs. It recently reiterated its buy rating and $10.70 price target on the company’s shares. 

Wesfarmers Ltd (ASX: WES)

Another share for income investors to consider is this conglomerate. Thanks to the surprise election result last month, consumer sentiment is expected to be given a major boost thanks to tax cuts. Furthermore, with many tipping the housing market to rebound in 2020, the company’s key Bunnings business could be well-positioned to benefit from increasing demand for home improvement products. Combined with potential earnings accretive acquisitions, I think Wesfarmers could deliver solid earnings and dividend growth over the next few years. At present, I estimate that its shares will provide investors with a fully franked 4.3% dividend yield over the next 12 months.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.