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Interest rates are falling, these 5 dividends are rising

According to The Australian, online savings accounts average interest rates are only 3.65% but there’s potential for the RBA to go lower in the next year.

Dividend yields from some great stocks are over 10% fully franked and provide an opportunity for shareholders to make some great capital gains as well. Here’s 5 stocks that have rising dividends and solid track records for earnings growth.

#1 Telstra (ASX: TLS)

Telstra’s dividend is legendary and it could be one reason why its share price has skyrocketed in the past 18 months. Despite an amount of uncertainty surrounding the NBN deal, the company will work in the best interest of shareholders and likely increase dividends in coming years. Morningstar are predicting dividends to rise by 1 cent per share in 2014 and up to 4 cents by 2016.

#2 M2 Telecommunications (ASX: MTU)

M2 is the owner of brands such as Commander, Dodo and Primus telecom. Like Telstra, their share price has rocketed in recent years thanks to a good dividend payout and both organic and acquisitive growth. It currently pays a 20 cent full year dividend but it could go as high as 29 cents in the next 2 years.

#3 BC Iron (ASX: BCI)

BC Iron’s stock price has risen over 90% in the past year as the company upped production levels and profit significantly. BC pays an 8.2% (plus franking credit) dividend that’s unparalleled in the resources sector. Morningstar predicts its dividend payout will rise to 44 cents per share in 2014.

#4 IOOF Holdings (ASX: IFL)

Fund manager IOOF holdings has, like many financial stocks, been on the receiving end of many tailwinds in the past year, and has risen over 50% in value. Currently it pays a 4.9% dividend although its payout is likely to increase to more than 50 cents per share by 2016.

#5 Westfield Group (ASX: WDC)

Westfield pays a very stable dividend, meaning it’s consistently increased its dividend year after year. At current prices it pays a 4.6% unfranked return but that’ll increase in the next 3 years. Westfield is priced to perfection but could hold considerable value for those looking to the horizon for long term gains.

Foolish Takeaway

Good dividends are on the tip of everyone’s tongue as both term deposits and property yields have failed to impress investors. These are just some of the opportunities that await potential investors, who are looking for more risk but bigger returns. Don’t rest on your laurels, start chasing a better return today and get on your way to financial freedom – you deserve it.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.  

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