5 blue-chip dividend shares to buy and hold for the long term
When looking for great blue-chip dividend shares to invest in, I believe the best ones are the ones you can put in your portfolio and not worry about. For this reason, no matter how tempting the yield is, I would stay away from a share like BHP Billiton Limited (ASX: BHP), which I’m sure has been keeping many investors awake at night. I feel the following five shares offer investors stable earnings and dividends, that will help them sleep soundly at night.
Coca-Cola Amatil Ltd (ASX: CCL) shares yield a partially-franked 5.3% dividend. Because the company is growing its presence in the Indonesian market at a rapid pace, I believe that earnings growth will begin to grow at a strong rate for the next few years. I have said before that I believe the Indonesian and Papua New Guinea segment, which according to its annual report currently represents 19% of total sales, will one day become its biggest segment, and I stick by this still. Indonesia’s growing consumer class, which McKinsey research predicts will rise to 90 million people by 2030, will be the catalyst for this growth. Furthermore the company’s bottom line should be bolstered by its 10-year agreement with the maker of Jim Beam Bourbon, Beam Suntory. The agreement is for exclusive distribution rights in its territories.
IOOF Holdings Limited (ASX: IFL) now pays a whopping 7.3% fully-franked dividend. IOOF Holdings is an Australian financial services company, providing a portfolio of high-quality investment and advice platforms. I feel these excellent products should help grow earnings and provide share price gains for investors. It has grown its dividend four years in a row, and I believe it will continue to do so for at least another four years.
McMillan Shakespeare Limited (ASX: MMS) shares are yielding a fully-franked 5.8% dividend. This leading salary packaging, novated leasing, and asset management company currently trades on a price-to-earnings ratio of just 10. According to data provided by CommSec, analysts expect earnings to grow by over 13% per year in the next two years. I believe this growth in earnings will help keep the excellent dividend growth we have seen in the last five years, which averaged an increase of almost 17% per year.
Spark New Zealand Ltd (ASX: SPK) shares pay a good, but not franked, 6.6% dividend. I like to think of Spark as the Telstra of New Zealand. According to its 2015 annual report, Spark increased its mobile phone market share to 41%. Although its broadband market share fell by 1%, it managed to increase its subscriptions by 1.6%. Because the company has been producing a return on equity of around 20% consistently for the last 5 years, I believe Spark will provide steady and predictable earnings growth in the future with an equally stable dividend.
Telstra Corporation Ltd (ASX: TLS) is my favourite dividend share on the Australian Stock Exchange, and it currently pays out a fully-franked 5.7% dividend. As the shares are down almost 15% in the last 12 months I believe the shares not only offer this great dividend, but some excellent share price gains, too. Its market-leading position in mobile phones and broadband will help grow earnings for many years, and its move into providing high-speed data infrastructure for financial markets should go some way to securing its long-term growth prospects.
For me, these five shares represent strong and stable dividend payers that you can put in your portfolio and forget about. This is the best kind of income investing in my opinion.
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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
When looking for great blue-chip dividend shares to invest in, I believe the best ones are the ones you can put in your portfolio and not worry about. For this reason, no matter how tempting the yield is, I would stay away from a share like BHP Billiton Limited (ASX: BHP), which I?m sure has been keeping many investors awake at night. I feel the following five shares offer investors stable earnings and dividends, that will help them sleep soundly at night.
Coca-Cola Amatil Ltd (ASX: CCL) shares yield a partially-franked 5.3% dividend. Because the company is growing its presence in the Indonesian market at a rapid pace, I believe that earnings growth…