Woolworths Limited (ASX: WOW) shares, National Australia Bank Ltd. (ASX: NAB) shares and Telstra Corporation Ltd (ASX: TLS) shares are household names and investment portfolio stalwarts.
Woolworths
Woolworths is on a comeback to restore its status as Australia's top supermarket following years of poorly performing sales and profit growth — not to mention the Masters mishap. Shares of the Fresh Food People fell from grace in 2014 as Coles, owned by Wesfarmers Ltd (ASX: WES), and Aldi continued to steal its foot traffic by turning up the heat on price and service. While the customers' jury is still out, investors appear to be voting with their wallets, with the Woolies share price up 16% in a year. After cutting its dividend, Woolworths shares are tipped to pay a fully franked dividend of 3% in the next year.
NAB
National Australia Bank was slapped with the Big Bank levy earlier this month, along with its peers. This comes at a time when NAB is posting bigger profits but staring down the barrel of slower house price growth and economic activity. NAB is a leader in business banking in Australia and New Zealand, which is why some investors prefer it over its rivals, which are more exposed to residential property and investor lending.
National Australia Bank shares are forecast to pay dividends of 6.5% fully franked in the year ahead.
Telstra
Telstra is Australia's number one mobile network operator and a heavyweight in everything telecommunications. The rollout of the National Broadband Network (NBN) is 'levelling the playing field' for smaller competitors looking to offer broadband packages and home phone. In the past, they would pay Telstra for access to its copper cable network. Looking forward, investors hope that the Government's payments for Telstra's copper network and its ongoing mobile dominance will cover a fall in profits associated with the increased competitive environment. Currently, analysts are forecasting modest falls in Telstra's dividend payments over coming years, yet are forecast to yield dividends equivalent to more than 6% fully franked.
Foolish Takeaway
Fully franked dividends are a great way to boost after-tax income, especially if the shares are owned for more than 45 days. However, for long-term investors holding shares for at least three to five years, the benefit of franking credits should not be underestimated.
I'm not buying any of the three blue chip shares above, today. Instead, I'm looking for faster-growing, smaller, fully franked dividend shares to buy.
