3 dividend stocks I'd buy with $50,000

Are you sick of low interest rates? Three alternative dividend stocks firmly on my watchlist are Slater & Gordon Limited (ASX:SGH), Coca-Cola Amatil Ltd (ASX:CCL) and Village Roadshow Ltd (ASX:VRL).

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last week I highlighted how simple it is to double your stock portfolio in 10 years with compound interest, what Albert Einstein described as, "the eighth wonder of the world".

In the article, I used the renowned dividend payer, Telstra Corporation Ltd (ASX: TLS), as an example of how your wealth could grow exponentially over time with relatively little capital gains.

If I had $50,000 to invest in dividend stocks today, I would use the same principle I outlined before and look to add a number of reliable companies to my long-term portfolio, with the aim of doubling its size in just 10 years. Here are three I'd buy right now…

1. Entertainment: Village Roadshow Ltd (ASX: VRL). Village does everything from blockbuster movies like The Great Gatsby to the running of iconic tourist attractions such as Warner Bros. Movie World, Sea World, Wet'n'Wild, Paradise County and Outback Spectacular. It trades on a forecast dividend yield of 4.4% fully franked with analysts expecting further increases in coming years.

2. Food and Beverage: Coca-Cola Amatil Ltd (ASX: CCL) is the exclusive bottler and distributor of products from The Coca-Cola Company to Australia and five neighbouring countries including Indonesia. A price war between Coles and Woolworths and rival Schweppes coupled with ongoing woes for its SPC Ardmona business has resulted in CCA missing earnings guidance. This has taken the fizz out of its shares and provided long-term investors an excellent opportunity to buy its stock on the cheap. Analysts are forecasting a partially franked dividend of 4.6%.

3. Legal Services: Slater & Gordon Limited (ASX: SGH) is Australia's biggest listed law firm, but probably isn't the first company you think of when dividends are written about. However, Slater & Gordon is rapidly growing in the UK market and although it currently trades on a forecast dividend yield of just 1.5% fully franked, growing earnings per share will deliver higher dividend payouts, overtime. Indeed, with a payout ratio of just 25% and $180 million in retained earnings, there's plenty of room for improvement.

Our #1 stock for 2015 – Yours FREE!

Each of these dividend stocks are at the top of my buy list (I already own Coca-Cola warrants and Slater & Gordon shares) and present as viable income alternatives to overpriced big bank and supermarket stocks. If I were to pick one to purchase right now, it'd be Slater & Gordon.

Motley Fool Contributor Owen Raszkiewicz is long Jun 2016 $5.41 Warrants in Coca-Cola Amatil and owns shares of Slater & Gordon. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »