MENU

Why I would snap up these high-yielding dividend shares today

As interest rates are at record lows and showing no signs of increasing in the near future, I don’t believe there is much incentive in keeping cash in high interest savings accounts.

Instead I would suggest investors put those funds to work in the share market. After all, with an average dividend yield of 4.3%, there certainly are a lot of options for investors.

Three dividend shares which I would consider today are as follows:

With the G8 Education Ltd (ASX: GEM) share price down around 12% in the last 30 days, its shares now provide investors with a trailing fully franked 6.6% annual dividend paid quarterly. Although its falling occupancy levels is a concern, with childcare demand expected to rise strongly I’m optimistic that things will improve greatly in FY 2017. In the long-term the company has its eyes firmly on the lucrative China market. If G8 Education is able to make a success of its proposed expansion into China, there certainly would be significant room for its dividend to grow over the next decade.

The Retail Food Group Limited (ASX: RFG) share price has not had a great start to 2017 and finds itself lower by a massive 27%. Although I’m not a big fan of all of its brands, I believe its coffee businesses are what makes it a buy today. The strong performance of its Coffee Retail segment was a key reason Retail Food Group delivered half-year net profit growth of 12.7%. The good news is that the company sees significant room for the businesses to grow internationally, which I believe should result in solid earnings growth over the next few years. This should allow it to continue to grow its dividend, which currently provides a trailing fully franked 5.7% yield.

The Telstra Corporation Ltd (ASX: TLS) share price has been hammered in the last few months, falling a whopping 20% year-to-date. Concerns over TPG Telecom Ltd (ASX: TPM) launching its own mobile network and stealing market share from the telco giant appear to be behind the decline. Although I feel Telstra will inevitably be impacted, I think fellow telcos Optus and Vodafone are likely to suffer the most. All in all, I feel the sell-off may have been a bit of an overreaction. So with Telstra providing a trailing fully franked 7.5% dividend, I think it could be a great option for income investors today.

Finally, as well as growing earnings like wildfire, these growth shares pay solid fully franked dividends as well. They could be great options for investors that are prepared to make buy and hold investments today.

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

Discover the name of this "new breed" of blue chip along with 2 others in our new FREE report "The Motley Fool's Top 3 Blue Chips Stocks For 2017."

Click here to receive your copy.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.