With an average dividend yield of 3.7%, the Australian share market certainly is a great place for income investors to invest.
Especially after recent market declines mean that a number of dividend stars provide even greater yields than normal. But should you invest in them all?
The G8 Education Ltd (ASX: GEM) share price has fallen 12% in the last three months. Concerns over occupancy levels and the loss of investment from CFCG Investment Partners International have weighed heavily on its shares. This decline means the childcare centre operator's shares now provide a trailing fully franked 7% dividend. Whilst I'm not as bullish on G8 Education as I was when it first secured the investment from CFCG Investment Partners, at the current share price it may be worth considering.
The Telstra Corporation Ltd (ASX: TLS) share price has fallen approximately 20% in the last 12 months over concerns of increased competition and lower-than-expected NBN margins. This has left its shares trading at a lowly 14x trailing earnings and providing a trailing fully franked 6.9% dividend. I believe this makes it a great time to invest in the telco giant and would choose it ahead of its telecommunications industry rivals.
The Vita Group Limited (ASX: VTG) share price is down a whopping 74% in the last 12 months. The operator of Telstra retail stores came under heavy selling pressure after Telstra advised of plans to cut its remuneration significantly and reorganise its stores into clusters. In light of this decline Vita's shares provide a trailing fully franked 17% dividend. Unfortunately I feel it is very unlikely that Vita's dividend will be maintained and suspect it could even be suspended in the future. This makes it one to avoid in my opinion.
