Whether you're running a self-managed super fund or in the early stages of wealth accumulation the benefits of owning high-yielding stocks can be immense. Not only do dividends provide a steady stream of income – which is particularly handy in retirement – but they are (often) a sign of a solid, profitable business model. The other big advantage of dividends is that they allow an investor to reinvest and compound their returns into other appealing investment opportunities.
While most of the market's attention continues to be focussed on the likes of blue chips such as Telstra Corporation Ltd (ASX: TLS) and National Australia Bank Ltd. (ASX: NAB), when it comes to yield there are even higher and arguably less risky opportunities for yield seekers.
Take for example Myer Holdings Ltd (ASX: MYR). Although currently going through a rough patch the stock is available on a forward price-to-earnings ratio of just 10.6. The leading department store operator is also forecast to pay a dividend totalling 15.8 cents per share (cps) in the coming 2015 financial year. With the share price trading near its 52-week low, astute investors have the opportunity to purchase the stock on a forecast fully franked yield of 7.4%!
