3 stocks yielding over 5%: Australia and New Zealand Banking Group, Insurance Australia Group Ltd and Woodside Petroleum Limited

Grab a 5%+ yield with Australia and New Zealand Banking Group (ASX:ANZ), Insurance Australia Group Ltd (ASX:IAG) and Woodside Petroleum Limited (ASX:WPL).

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With Aussie interest rates likely to head south during the course of 2015, dividend yields could matter more to investors than many people realise. Certainly, they have been important in recent years, with interest rates being just 2.5%, but looking at other developed economies such as the US and UK makes it clear that interest rates could go far lower.

So, with that in mind, the likes of Australia and New Zealand Banking Group (ASX: ANZ), Insurance Australia Group Ltd (ASX: IAG) and Woodside Petroleum Limited (ASX: WPL) could be worth buying at the present time. Here's why.

Top notch yields

Even though the ASX has an appealing yield of 4.6%, ANZ, IAG and Woodside all offer a considerably better income proposition. For example, ANZ currently has a yield of 5.6%, while IAG's is even higher at a whopping 6%. And, when taking into account the forecast fall in dividends per share for next year, even Woodside yields more than the ASX at 5.1%. Together, this equates to a combined yield of 5.6% which, because it is fully franked, can make a real difference to your income at the present time.

Track records

Of course, the falling price of oil makes it difficult for Woodside to do anything except cut dividends but, in the long run, investors in the company, along with those in IAG and ANZ, should have a degree of confidence in dividend growth. That's because, over the last five years, all three companies have increased dividends per share at a double-digit annualised rate.

For example, IAG's dividends have risen by a whopping 31.3% per annum since 2010, with Woodside's growth of 15.3% per annum and ANZ's annualised rise of 11.8% also holding considerable appeal. These impressive track records show that all three companies have relatively generous shareholder policies when it comes to dividends and this could continue.

Valuation

Despite their considerable income appeal, all three stocks trade on relatively enticing valuations. For example, ANZ has a price to earnings (P/E) ratio of just 12.5, which is lower than the ASX's P/E ratio of 15.3, while IAG's P/E of 12.4 is even more appealing than that of its financial peer. Meanwhile, Woodside trades on a forward P/E ratio of 15.8 which, although higher than the ASX's rating, still seems to offer good value for money when you take into account its yield and its long-term track record of shareholder payout increases.

As a result, all three stocks seem to be excellent income plays and could be worth adding to your portfolio right away.

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.

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