Last year I felt the shares of Australia and New Zealand Banking Group (ASX: ANZ) were dirt cheap and a strong buy.
But as they have now rallied a whopping 36% in the last six months, I believe they are fully valued and offer limited upside. Because of this I wouldn't recommend an investment at this stage and would instead suggest waiting for a pull-back in its share price in order to buy at a fairer price.
Until that happens income investors could consider an investment in these high-yielding shares:
Dicker Data Ltd (ASX: DDR)
Despite its share price climbing a massive 46% in the last 12 months, this wholesale distributor of computer hardware, software, and related products still offers a generous yield. Currently its shares provide a trailing fully franked yield of 6.9%, but thanks to a strong performance in FY 2016 I expect this will increase further this year. Especially with its expansion into the fast-growing cloud services market. Another bonus for income investors is that Dicker Data pays its dividend quarterly.
McMillan Shakespeare Limited (ASX: MMS)
This leading salary packaging, fleet management, and retail finance services company is forecast to provide a fully franked 5.7% in FY 2017 according to CommSec. Through its popular brands Maxxia, RemServ, Interleasing, and Holden Leasing, I believe McMillan Shakespeare has a strong position in a growing industry. This gives me confidence that the company has several years of solid growth ahead of it.
Village Roadshow Ltd (ASX: VRL)
Whilst this entertainment company didn't have a great 2016, I feel confident that a turnaround is coming. Management believes it has put in place the foundation building blocks for long term growth in each of its businesses. One such plan is to bring the hugely popular Topgolf entertainment centre to Australia in 2017 to boost its theme parks segment. So with its shares expected to provide a fully franked 5.9% dividend in FY 2017, I feel now could be a great time to snap them up.
