So far this year, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has gone nowhere, falling 1.9% in what really is an uninspiring performance.
But, emphasising the importance of dividends, the S&P/ASX 200 Total Return (Accumulation) index is up 0.4% in 2016 (a difference of 2.3%).
We've also written a number of times of the importance of dividends, noting a number of studies that have shown that dividend-paying companies are hugely important to long-term returns.
Here are five companies that combined – could just be the ultimate high-yield dividend portfolio.
Telstra Corporation Ltd (ASX: TLS)
How could anyone go past the giant Telco Telstra with its dominance of the Australian mobile and broadband markets? At the current price of $5.57, Telstra is still paying investors a fully franked dividend yield of 5.6%.
Insurance Australia Group Ltd (ASX: IAG)
A dominant Australian and New Zealand insurer, IAG is currently offering shareholders a trailing dividend yield of 5.2%. A well-run company, IAG faces low growth in returns on its investment portfolio, but has consistently maintained disciplined insurance coverage – so much so that the world's greatest investor, Warren Buffett, chose to invest in the company.
Platinum Asset Management Limited (ASX: PTM)
With the share price down from a 52-week high of $8.34 at the current price of $5.56, Platinum offers a dividend yield of 6.5% (fully franked). The fund manager has an outstanding track record over many years and is backed by one of Australia's best investors in Kerr Neilson.
Countplus Limited (ASX: CUP)
Perhaps a controversial choice, Countplus faces challenges in its accounting and wealth management businesses, but should still be able to pay its regular quarterly dividend of 2 cents fully franked. That gives shareholders a dividend yield of around 9.5% fully franked, and a cheap price to offset some of the risks.
SPDR S&P/ASX 200 Fund (ASX: STW)
Another controversial choice, the SPDR 200 Fund tracks the performance of the S&P/ASX 200, and means that it is heavily weighted towards Australia's largest companies, including the 2 big miners, the big four banks and the big supermarket operators. However, at the current price of $49.00, the fund is yielding 5.1%, and could offer an attractive price to enter the share market, particularly given the 7.3% fall in the Top 20 stocks year-to-date.
Owning dividend shares could mean the difference between enjoying a wonderful retirement, and existing on the government pension. I know which one I'd prefer.
