If you are looking for blue chip stocks with 5% dividend yields, National Australia Bank Ltd. (ASX: NAB) and Wesfarmers Ltd (ASX: WES) should be at the top of your watchlist.
NAB – dividend yield: 6.4% fully franked
National Australia Bank is Australia's third largest bank. Earlier this week, NAB updated the market on its operational and financial performance in the current financial year. The company's share price fell marginally when the results revealed a minor fall in profit. However, analysts were previously forecasting a fall in the bank's dividend payment due to a rise in regulatory pressure and a squeeze on profits.
With the updated results showing a 1% fall in cash profit, analyst concerns may be overdone. If that's true the bank's forecast 6.4% dividend could be very tempting.
Wesfarmers Ltd – dividend yield: 5.1% fully franked
Wesfarmers is the owner of Bunnings Warehouse, Coles, Kmart, Target and more. Despite the company's share price rising firmly over recent years, its dividend payment is forecast to grow healthily in the near future.
Wesfarmers has previously stated that online shopping giant, Amazon, is the single biggest threat to its business. Amazon is due to arrive in Australia in the near future.
Buy, Hold or Sell
NAB and Wesfarmers are two easy-to-understand dividend stocks forecast by analysts to reward shareholders with a steady income in coming years.
However, forecasts for growth are not always right. In fact, most of the time they are quite a way off from what actually happens.
In my opinion, NAB and Wesfarmers shares appear a little expensive at today's prices. I'd want to buy them at prices more than 10% below today's levels, but I know that may not happen anytime soon.
Until that time I'll be looking for other big dividend stocks to buy.
