Investors are always on the lookout for strong dividend payers. Yields above 5% are undoubtedly attractive, especially when they come with franking credits attached. Here are two companies paying strong dividends today:
Thorn Group Ltd (ASX: TGA) is an out-of-favour consumer leasing company that pays a 6.9% fully franked dividend. Shares have been beaten up recently over fears about likely penalties following a recent regulatory investigation, but the low price and high yield appears attractive, especially considering the underlying business appears strong.
Management recently divested an under-performing business in order to focus more attention and capital on the core leasing business, which should hopefully lead to improving performance over the next couple of years. I feel that the low price helps to compensate investors for the risks, and would consider buying Thorn at today's prices.
G8 Education Ltd (ASX: GEM) is a child care centre operator that grows primarily through buying new childcare centres, and pays a 5.8% fully franked dividend. The company has a high debt burden and has recently announced that it would continue its aggressive acquisition program despite recent poor performance in existing businesses.
Unlike Thorn however, the G8 share price does not appear to factor in concerns facing the company, such as falling occupancy and increasing competition. Although management is investing in improving the childcare experience and customer satisfaction at its centres, today's prices don't provide enough of a margin of safety for investors, in my opinion. I would not buy shares in G8 today.
