Popular dividend shares like Transurban Group (ASX: TCL) and Sydney Airport Holdings Ltd (ASX: SYD) might have taken a beating recently, but dividend shares will remain a very popular option for investors while interest rates are at record lows.
Since most investors will first look at blue-chip shares for reliable dividends (note dividends are never guaranteed), I thought it would be a useful exercise to compare how the dividend yields of the ASX's 15 biggest shares stack up.
The following dividend yields are based on forecast figures provided by CommSec and historical franking levels:
| Company | Market Capitalisation | Dividend Yield | Franking % | Grossed Up Yield |
|
Commonwealth Bank of Australia (ASX: CBA)
|
$114 billion | 5.05% | 100% | 7.22% |
|
Westpac Banking Corp (ASX: WBC)
|
$111 billion | 5.63% | 100% | 8.04% |
|
Australia and New Zealand Banking Group (ASX: ANZ)
|
$91.7 billion | 5.11% | 100% | 7.30% |
|
National Australia Bank Ltd. (ASX: NAB)
|
$83.3 billion | 6.15% | 100% | 8.78% |
|
BHP Billiton Limited (ASX: BHP)
|
$82.3 billion | 3.35% | 100% | 4.79% |
|
Telstra Corporation Ltd (ASX: TLS)
|
$61.9 billion | 6.04% | 100% | 8.63% |
|
Wesfarmers Ltd (ASX: WES)
|
$47.9 billion | 4.98% | 100% | 7.11% |
|
CSL Limited (ASX: CSL)
|
$46.1 billion | 2.07% | 0% | 2.07% |
|
Woolworths Limited (ASX: WOW)
|
$31.4 billion | 3.58% | 100% | 5.12% |
|
Macquarie Group Ltd (ASX: MQG)
|
$29.9 billion | 4.87% | 45% | 5.81% |
|
Woodside Petroleum Limited (ASX: WPL)
|
$26.4 billion | 3.99% | 100% | 5.71% |
|
Rio Tinto Limited (ASX: RIO)
|
$25.6 billion | 4.00% | 100% | 5.72% |
|
Scentre Group (ASX: SCG)
|
$24.5 billion | 4.78% | 0% | 4.78% |
|
Transurban Group (ASX: TCL)
|
$21.2 billion | 4.87% | 15% | 5.12% |
|
Brambles Limited (ASX: BXB)
|
$19.9 billion | 2.40% | 25% | 2.66% |
Interestingly, nearly every share on this list provides a grossed up dividend yield that easily exceeds the best term deposit rates on offer.
Despite this, investors should still consider the possibility of capital losses and whether or not a company's current dividend is sustainable. Remember, BHP, Woolworths and ANZ were all forced to cut their dividend recently.
On top of that, investors should never base their investment decision to buy or sell shares on the dividend yield alone. It is important to consider whether or not the company will be able to grow its earnings and hopefully its dividend also.
If I had to buy three shares from the list above it would have to be Macquarie Group, CSL and Transurban, although at slightly lower prices. Each of these companies enjoy strong growth prospects and have an excellent track record of delivering returns for shareholders.
