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Telstra, Myer, Coca-Cola Amatil: 3 dividend stocks to buy in 2014

Typically, the big four banks and supermarket giants Wesfarmers (ASX: WES) and Woolworths (ASX: WOW) are amongst the first companies investors think of when looking for dividend stocks to include in their portfolio.

While these might represent strong companies with promising futures, Foolish investors know that no company is a buy at any price. The corporations mentioned above could certainly have growth left in them, but at today’s prices, they stand little chance of delivering market-beating returns.

In fact, their share price could fall over the coming 12 months, reversing any gains made from their attractive dividend yields.

The point is that investors must not only consider the strength and future of the company, but also the price they are willing to pay. Instead of investing your hard-earned money in stocks that are currently overpriced, consider these three high-yielding stocks for 2014:

Telstra (ASX: TLS): Telstra shares have risen substantially over the last three years or so, but there is plenty of value left to be realised as the telecommunications giant tightens its grasp over the industry! Their shares are currently trading at $5.25 and offer a 5.4% fully franked dividend. The dividend itself is more than you would get from a term deposit.

Coca-Cola Amatil (ASX: CCL): The manufacturer and distributor of some of the world’s most popular beverages hasn’t had the best of years, plagued by profit downgrades due to pricing pressures from rival Schweppes. Its shares have fallen over 10%, compared to the S&P/ASX 200’s (Index: ^AXJO) (ASX: XJO) 14.6% gain. Given the strength of its brands and its push into Indonesia, Coca-Cola Amatil should bounce back strongly. Its shares are trading at $12.09, with a 4.6% dividend yield.

Myer (ASX: MYR): Myer is set to benefit from a pick-up in consumer confidence as well as the low interest rate environment, which many analysts have forecast to fall even lower. Shares are currently trading at $2.74 after having hit a high of $3.26 earlier in the year, and offer a 6.4% fully franked dividend yield.

Foolish takeaway

The big four banks rallied strongly in 2013 as investors sought out their high yields. With their stocks becoming overpriced, investors should consider other companies which also offer attractive distributions for 2014.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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