MENU

3 of the highest-yielding blue chips on the ASX

With the cash rate set to fall even further later in the year, perhaps it’s time grab a high yielding stock trading at a discount – the S&P/ASX 20 (ASX: XTL) is offering up many.

It seems hard to believe that only one month ago investors chasing solid incomes from reasonably safe stocks now find themselves, in some cases, more than 15% in the red. Picking stocks is tough work but at the heart of any successful strategy, whether investors are income seeking or looking for growth, buying near the troughs and selling at the peaks is the best way to make money.

Last month, blue-chip stock prices were at record levels and high dividend yields were all but a memory, but today it’s a different story. Here are 3 of the top 20 stocks that pay fully-franked 6% dividends and now have a modest price tag.

3 stocks perfect for your SMSF?

A month ago National Australia Bank (ASX: NAB) was trading over 16% higher than today’s opening price tag of $28.37. Investors, traders and SMSFs are all getting a bargain if they’re in it for the long term, since it pays shareholders a 6.6% fully franked return based on current prices – try getting that in a term deposit.

Another bank that breaks the 6% fully franked level is Westpac (ASX: WBC). Westpac has taken the biggest fall of any in the ASX’s top 20 since 1 May, falling to a low of $27.41 on Wednesday, representing a loss of almost 19%. However, investors have begun to realise that they are going to be hard-pressed to find another investment with the same yield and safety, since Wednesday’s lows its share price has regained over 2.5%.

The last high yielding stock is not unfamiliar to income investors and is usually the most heavily traded stock in the S&P/ASX 200 (ASX: XJO) (^AXJO) by a measure of volume. Telstra (ASX: TLS) is another Aussie favourite that reached record highs in recent months, only to fall back to healthy prices in past week. Currently paying a 6.1% fully franked dividend it won’t last long at this price.

Foolish takeaway

Investors seeking safety should look no further than our top 4 banks and Telstra, as long as you buy at the right prices, the income and safety that these shares offer is unparalleled. There is no doubting it, the local market has entered correction territory, meaning it has wiped 10% off its value. I’m not going to say if it’ll be today, but the market will be trading back at new highs soon enough, especially with interest rates dropping, equities is where many Australian’s will push much of their wealth into throughout this year. Maybe it’s time to jump the queue and buy some quality stocks.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Owen Raszkiewicz does not own shares in any of the companies mentioned in this article.

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.