It's tough to find companies that offer a high yield and trade at an attractive price. Indeed, it's even tougher when the ASX is near to its six-year high. However, Nuplex Industries Ltd (ASX: NPX) and Growthpoint Properties Australia Ltd (ASX: GOZ) could offer just that, as well as superb growth potential.
Top yields
As mentioned, both Nuplex and Growthpoint are incredibly strong when it comes to dividend yields. While the ASX's yield of 4.4% is hardly shabby (and is a lot better than interest rates of 2.5%), both Nuplex and Growthpoint offer much better prospects for income-seeking investors.
That's because Growthpoint, for instance, currently yields a highly impressive 6.8%, while Nuplex's yield is even higher at a whopping 7.9%.
Growth potential
What makes both companies so appealing as income plays, though, is their potential for dividend per share growth. This stems from strong earnings growth that is forecast for the next two years, with Nuplex expected to increase earnings per share (EPS) by 18.3% in the current year and by 12.1% in the following year. This should enable the company to increase dividends per share from last year's $0.195 to $0.23 in FY 2016. At its current share price this would equate to a dividend yield of 8.5%.
Furthermore, Growthpoint also has strong earnings growth potential, with its bottom line expected to increase by 16.9% in the current year and by 5.3% in the following year. With the company set to pass on at least some of that growth to shareholders via increased dividends per share, Growthpoint could be yielding 7.5% in FY 2016, which would be hugely attractive to income seekers.
Looking ahead
On the face of it, Nuplex is by far the cheaper of the two stocks. That's because it trades on a price earnings (PE) ratio of just 10.3, which is well below the ASX's P/E of 15.8. Furthermore, Nuplex has a price to earnings growth (PEG) ratio of just 0.68, which points to growth at a very reasonable price.
However, that's not to say that Growthpoint isn't great value either. Its P/E ratio of 15.2 still compares favourably to the ASX, while its PEG ratio of 1.38 indicates that investors are not being asked to overpay for a strong growth rate.
So, with enticing dividend yields, the potential for further dividend increases resulting from strong bottom line growth prospects and attractive valuations, Nuplex and Growthpoint are two 6%+ yielders that could make a positive contribution to Foolish portfolios.
