Sometimes, investing hopefuls get caught up trying to find short growth through dividends and market volatility, but seasoned investors know that predicting short term fluctuations is impossible and the real returns are made in the long term.
The market has proven it, time and again. For example, when interest rates began to fall, investors quickly jumped on board the next best thing and bought high yielding stocks like Commonwealth Bank (ASX: CBA), only to get burned by them in one months’ time, lose 10% in value and receive NO dividends.
However, long-term CBA shareholders have made money, and lots of it. In the past 10 years, CBA shares have risen a huge 135% PLUS dividends. So, looking forward here are five stocks that pay fully franked dividends and have a great long term upside.
ANZ (ASX: ANZ) is a favourite for long-time growth investors. Where NAB (ASX: NAB) has failed overseas, ANZ has seemingly done everything right. With global markets now focusing on Asia, ANZ stands to gain from the massive amounts of investment that will be done through the region and with a 5.2% fully franked dividend, it’s got it all.
Washington H Soul Pattinson (ASX: SOL) has been listed on the ASX for over 100 years, so something must be going right. Paying a fully franked return of 3.3% and an average of 13% capital return over each of the past 10 years, the question is: Why don’t I own it?
Suncorp (ASX: SUN) is another stock which, like WHSP is slightly pricey, but if you’re in it for the long term, the dividend of 4.2% will help you get over it. With popular insurance names like GIO, AAMI, Suncorp, Vero, Apia and Shannons, you’re insured for short-term risks if the horizon is your destination.
NIB Holdings (ASX: NHF) is a national provider of private health insurance, life insurance and travel insurance that covers more than 900,000 people nationwide. Though it provides low-cost health premiums, as an investor you’re almost guaranteed maximum cover with the 4.7% fully franked dividend and long term growth prospects.
Ramsay Health Care (ASX: RHC) is one of Australia’s great success stories. Paying a 1.8% fully franked dividend mightn’t be that great, but when you consider it’s risen 735% in the past 10 years, I think you’ll forgive the dividend. Although it is unlikely to have the same huge amount of growth in the next 10 years, you can be guaranteed management will be looking for more opportunities and paying out bigger dividends. Investors should be wise and note that market expectations are weighing in on the stock and with a P/E of just under 25, perhaps patience could save you some of the purchase price.
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!
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Motley Fool contributor Owen Raszkiewicz owns shares in ANZ and NIB.