Let's be honest with each other, we're not going to get rich with term deposits at current interest rates.
And with the RBA's official rate now at just 2.25%, you must have a lot of money tied up at your bank to make a decent return from your investment.
Fortunately, if you plan to invest for the long term (i.e. five years or more), there are a number of growing dividend stocks available on the local market – some inside and some outside of the S&P/ASX200 Index (ASX: XJO) (INDEX: ^AXJO).
Here are four of my favourite.
1. Insurance Australia Group Ltd (ASX: IAG) is the name behind brands such as CGU, SGIO and NRMA. As well as being a leading insurance operator in local markets, IAG is also expanding into Asia through joint venture partnerships. It is expected to yield a fully franked dividend of 5.83% in the next year – grossed up for franking credits, that's a whopping 8.3%!
2. Coca-Cola Amatil Ltd (ASX: CCL) has kicked off 2015 in a good way, following two troubling years of earnings downgrades and share price falls. However if Australia's exclusive distributor of Coca-Cola and Beam branded products can deliver on its cost-cutting measures and return to earnings per share growth, it'll look very cheap under $10 per share. At current prices it has a forecast 4.1% dividend yield.
3. Woolworths Limited (ASX: WOW) shares have also had a tough run in recent years, simply because the market has begun to speculate on a worsening outlook for its Groceries and Hardware businesses. However a falling share price means the owner of key retail brands such as Big W, Masters Home Improvement, Dan Murphy's and more, now has a better dividend yield, currently forecast at 4.4% fully franked.
4. Credit Corp Group Limited (ASX: CCP) is Australia's largest receivables management firm, with a market capitalisation of $530 million. If a worsening economy can be expected in coming years, Credit Corp will likely benefit from an increased debt ledger. In addition to this organic growth, its lending business and expansion into the USA should bode well for shareholders in the long term. It is forecast to pay a 3.6% fully franked dividend in the next year – 5.1% grossed-up.
