With the Westpac Banking Corp (ASX: WBC) share price making a new 12-month high yesterday, I think its shares are looking a touch expensive.
Because of this I feel there's a lot more downside risk than upside potential for any investors buying shares today.
So if you were considering an investment in Australia's oldest bank for its generous 5.5% dividend, perhaps the following three dividend shares would be better options instead.
Dicker Data Ltd (ASX: DDR)
This founder-led computer hardware company recently delivered full-year net profit after tax growth of 25% to $26 million. This strong performance allowed the company to increase its fully franked full-year dividend from 12.5 cents per share, up to 15.5 cents. At the current share price this equates to a yield of 6.5%. The good news is that management has forecast top line growth of 10% in FY 2017, which it believes will allow for further dividend increases.
G8 Education Ltd (ASX: GEM)
As well as recently announcing a solid half-year result, G8 Education revealed that it placed shares at a premium with China First Capital to raise $212.8 million in order to fund growth opportunities. Management advised that the funds will be used for committed child care acquisitions in Australia due for settlement over the next two years. I expect these acquisitions to not only boost its bottom line growth, but also allow the company to grow its dividend. At present G8 Education's shares provide a trailing fully franked 6.2% dividend.
Japara Healthcare Ltd (ASX: JHC)
Although the aged care operator delivered a weaker-than-expected first-half result, I still believe the long-term tailwinds of Australia's ageing populations makes it a great buy and hold investment. Japara is on track to deliver over 1,100 new greenfield places by FY 2020, which equates to an increase of almost 29% on its current places. Another key reason to invest is of course its dividend. At present its shares provide investors with an annualised fully franked 6.1% dividend.
