With interest rates rumoured to be moving lower this year, Aussie investors are quite rightly becoming more concerned about their incomes. After all, with inflation at 2.3% and interest rates being just 2.5%, a negative real return is a problem that many savers now face.
So, with this in mind, here are three stocks that when bought together in equal measure, offer a 4.9% yield. As such, they could make a major difference to your income this year.
Suncorp Group Ltd
Over the last five years, shares in Suncorp Group Ltd (ASX: SUN) have risen by a mightily impressive 55%. Despite this they still offer a yield of 6% (fully franked) and that's because the company has delivered exceptionally strong dividend growth during the period.
In fact, dividends per share have risen at an annualised rate of 11.8% over the last five years and Suncorp appears to be an excellent income choice due to it having a superb track record of increasing shareholder payouts. Although its shares do trade on a rather rich price to earnings (P/E) ratio of 17.4, it seems to be worth paying for such appealing income attributes.
Woolworths Limited
Although there is concern regarding the 13% growth in sales recorded by discount retailer Aldi in 2014, Woolworths Limited (ASX: WOW) still seems to offer excellent investment potential. Certainly, pricing pressures look set to be a feature of the next few years, but with a well-covered (and fully franked) yield of 4.6%, it still offers superb income prospects.
For example, Woolworths has a payout ratio of 70%, and this means that there is still scope for above-inflation rises in dividends over the short to medium term – even if profit growth is somewhat disappointing. Also note that dividends have increased by 11.6% per annum over the last 10 years, with longer term prospects for shareholder payouts seeming bright as a result of an excellent track record of dividend growth.
Transurban Group
Having increased dividends per share by 14.4% in the last year, income investors are rightly becoming more positive on Transurban Group (ASX: TCL). Evidence of this can be seen in the company's share price, which is up 36% in the last year.
Although this means that shares in the company now yield less than they did at 4% (partially franked), Transurban is forecast to raise dividends per share at an annualised rate of 11.1% over the next two years. This means that the company could be yielding as much as 4.7% next year – unless, of course, its share price continues to move higher as investors become even hungrier for fast-growing dividends.
