With high yields getting harder to find, here are three companies that should be able to at least maintain their current dividend pay-out rates and at current prices are yielding over 6%.
Finbar Group (ASX: FRI) is a Western Australian based property developer that has managed to fly under the radar of many investors despite being listed since 1995 and having a market capitalisation of nearly $350 million. Finbar's core business is in the development of medium to high density residential apartments and commercial property within WA.
The company has completed over 42 developments and has a further 12 properties currently being developed and seven further properties planned for future development.
Finbar has a good track record of paying out a growing stream of dividends to shareholders with the dividend rising from 1 cent per share (cps) in 2003 to 9.5 cps in 2013. The stock is currently trading at $1.55 and guidance from management suggests a similar result for financial year 2014 to FY 2013 but with potential upside, which makes the historical dividend yield of 6.1% look like a reasonable guide for the current year too.
Data #3 (ASX: DTL) is a business offering a wide variety of clients information technology (IT) solutions that fall into the three broad categories of software solutions, infrastructure solution and managed solutions.
Data #3 reported an 11.3% fall in earnings per share (EPS) to 7.88 cps in FY 2013 however the company was able to maintain its dividend at 7 cps, which represented a pay-out ratio of 89%. The lacklustre full-year result and outlook, which is heavily skewed to the second half, has seen the shares sold down to a 52-week low near $1. Assuming the 7 cps dividend can be maintained, the stock is trading on a 6.7% yield.
Collins Foods (ASX: CKF) operates 122 KFC (Kentucky Fried Chicken) restaurants throughout Queensland. While the company reported muted results for FY 2013, it managed to increase its dividend from 6.5 cps to 9.5 cps fully franked. Given the reasonably defensive nature of its business and with the share price at $1.57 this places the stock on a historic dividend yield of 6%.
Foolish takeaway
After an impressive rise in the stock market over the past year, few investors are expecting the same level of gains in the next 12 months. For some investors this means they will turn their attention and focus back to high yields over growth.
