According to the last one Westpac Banking Corp. (ASX: WBC) Weekly economic report, his team of economists continues to expect the Reserve Bank to reduce rates again before the end of the year.
This will bring the discount rate to a record low of 1% and put significant pressure on the interest rates offered with time deposits and savings accounts.
In light of this, I think it would be a good time to consider some of the generous dividend options that the Australian stock market has to offer.
Three that I would buy are listed below:
Coles Group Ltd (ASX: COL)
One of my favorite buying and holding dividend options on the Australian stock market is this supermarket giant. I'm a big Coles fan thanks to his leading position in a highly defensive sector and the management's focus on improving margins through automation. If management succeeds with this, it should put the company in a position to achieve solid growth in profits and dividends over the medium to long term. Based on its policy of providing 80% to 90% of its earnings as dividends, I believe its shares currently provide a fully anticipated 4.1% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Another dividend option to consider buying is this giant telco. Although his actions were strong in 2019 thanks to the better performance and success of his T22 strategy, I still see a lot of value in them. Especially now the telco giant has begun to cut its dividend to a sustainable level. In the first half of the year Telstra reduced its provisional dividend to 8 cents per share and is expected to do likewise with its final dividend in August. At 16 cents a share, Telstra still offers an attractive dividend yield of 4.2% completely free.
Westpac Banking Corp.
Because of the low interest rates offered by his savings accounts, I would rather invest in shares of this banking giant than leave my money in one of his accounts. Especially now that the real estate market is showing signs of card rebound in the short term. This could drive mortgage growth, increase bank profits and support its dividend. At present the Westpac shares provide a very generous profitability with a dividend release of 6.7%.
But if you are not passionate about Westpac, take a look at these first uniforms which are valued as purchases.
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Motley Fool collaborator James Mickleboro has no position in any of the stocks mentioned. Motley Fool Australia owns shares and recommended Telstra Limited. We Fools may not all have the same opinions, but we are all convinced that, considering a wide range of insights, we have become better investors. The Motley Fool has a disclosure policy. This article contains only general investment recommendations (with AFSL 400691). Authorized by Scott Phillips.
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