If you're seeking a portfolio that'll generate steady income for many years, you should start by building a base of quality blue chip shares.
Of course, it's important to do some research and pay a fair or bargain price for the shares you want to own.
Nonetheless, three dividend-paying companies that I think would make great dividend stocks are Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Flight Centre Travel Group Ltd (ASX: FLT).
Telstra – dividend yield: 5.7% fully franked
Telstra isn't just one of the ASX's best dividend-paying shares, it's also got long-term growth potential. Indeed, its push throughout Asian markets, expansion into new business lines and incumbency in the local market, place Telstra in good stead moving forward. While competition is heating up, payments from the government's NBN Co will bolster the company's already strong cash flow.
Wesfarmers – dividend yield: 5.1% fully franked
Wesfarmers' Coles may be the second-largest supermarket in Australia, but it is growing quickly. In addition, the conglomerate owns other great defensive businesses like Bunnings Warehouse, Officeworks, Kmart and more. With a 100-year track record, strong balance sheet and management team, Wesfarmers is one to watch closely.
Flight Centre – dividend yield: 4.2% fully franked
Flight Centre is growing quickly despite analysts' fears that the digital economy will disrupt its bricks-and-mortar network of travel agents. With a massive cash balance, the company is currently rolling out its franchise across the USA, UK and Europe. With its share price recently taking a hit, there's a lot to like about Flight Centre shares at today's prices.
Buy, Hold, or Sell?
Given their reputation as solid dividend-paying companies, each of these three shares deserve a spot on income investors' watchlists. However, at today's prices, I think Flight Centre is the best buy for new money. Wesfarmers and Telstra are closer to a hold; though, investors could do a lot worse than buying their shares at today's prices.
