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3 shares paying a fully franked dividend bigger than Insurance Australia Group Ltd’s 4.3%

The Insurance Australia Group Ltd (ASX: IAG) share price has enjoyed a strong run recently. The Warren Buffett investment, quota-share arrangement, and IAG’s InsurTech venture make for a sexy story, but it’s hard to deny that the company’s dividend yield (as a % of the share price) is no longer the best on offer.

Here are 3 companies that pay a bigger dividend than Insurance Australia Group right now:

Sky Network Television Ltd (ASX: SKT)

Sky Network is a company facing challenges in the way that content is distributed to and consumed by users, with the likes of Netflix and similar competing with pay-TV for viewers. Counteracting this is Sky’s ownership of sports media rights for the next few years, which prevents competition with one of Sky’s major customer drawcards.

Sky is a business in transition, with its latest offers involving no lock-in contracts and likely to result in higher churn and potentially lower revenue per user over the medium term. With an 8% trailing dividend, it could be an interesting contrarian idea for investors willing to investigate its competitive position further.

G8 Education Ltd (ASX: GEM)

Childcare centre operator G8 Education pays an attractive 6.6% quarterly dividend, fully franked. The company has a track record of growing profits and dividends over the medium term, although recent announcements suggest that competition is increasing. Management also continues to raise capital to fund further expansions, but I think as the company gets bigger it will become harder to find attractive centres to buy, and growth will slow.

Despite the recent capital raising at above-market prices, I would prefer to get G8 shares cheaper in order to build in something of a margin of safety.

Telstra Corporation Ltd (ASX: TLS)

Telstra Corporation shares have been sold off savagely in recent times, and now pays an estimated 7.8% fully franked dividend. While competition in the mobile space appears to be heating up, Telstra is one of the most recognised brands in Australia and investors are being offered attractive returns simply from holding the company for its dividend.

Profits and the dividend could come under some pressure, but it is also important to remember that Telstra has important advantages – like its partnership with retail specialist Vita Group Limited (ASX: VTG), which operates Telstra’s retail stores – that will serve it well over the next decade.

Not keen on Telstra, G8 Education, or Sky TV?  Discover our latest analyst recommendations right now:

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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