Many investors have learnt the hard way that focusing on dividends and yield is fraught with problems as not all dividends are maintainable.

Shareholders in BHP Billiton Limited (ASX: BHP) and Woolworths Limited (ASX: WOW) in particular are well aware of this situation with BHP’s recent interim dividend being chopped from 80.82 cents per share (cps) in the prior corresponding period (pcp) to just 21.37 cps in March this year.

Likewise, Woolworths’ latest interim dividend was sliced from 67 cps in the pcp to just 44 cps this year.

The experience learnt from these “blue chips” highlights that a focus on rock solid, maintainable dividends is extremely important for income seeking investors.

Here are four stocks that all offer trailing dividends which are well covered by earnings and importantly that are also expected to grow both earnings and dividends in the current financial year.

  1. IOOF Holdings Limited (ASX: IFL) – The diversified wealth manager paid a dividend which was 1.2x covered by earnings and is currently trading on a trailing fully franked dividend yield of 6.5%.
  2. Harvey Norman Holdings Limited (ASX: HVN) –  This leading retailer also paid a dividend which was 1.2x covered. The dividend is also fully franked and based on its current share price the stock is trading on a trailing yield of 5.1%.
  3. QBE Insurance Group Ltd (ASX: QBE) – Australia’s leading global insurer paid a dividend that was 1.4x covered. The stock is trading on a fully franked trailing dividend yield of 4.6%.
  4. Commonwealth Bank of Australia (ASX: CBA) – Australia’s largest bank paid a dividend last year that was 1.3x covered by earnings. The stock currently trades on a trailing fully franked dividend yield of 5.5%.

Wondering what the VERY BEST dividend stock to buy is?

Our resident dividend expert has named his Top Dividend Share for 2016. Not only are the shares dirt cheap, the company is trading on a 5.6% fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Tim McArthur 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.