With the ASX 200 index being somewhat rangebound, and with the RBA likely to keep interest rates around these low levels for the foreseeable future, dividend shares are looking attractive in today’s share market.
I’m on record as being bearish on the big four banks, seeing as they are facing headwinds on multiple fronts, the biggest being falling house prices and the risk of rising bad debts.
Yet the big four banks have a very strong competitive advantage. They have a high level of recurring revenue. For all the unsavoury revelations coming out of the banking royal commission, they still have a high level of customer loyalty and retention.
All that is revealed in their profitability, and particularly in bank dividends. Although dividends aren’t rising, they are stable, and offer investors a very attractive fully franked dividend yield.