3 high-yielding growth stocks

The yield itself isn't the only factor investors need to consider.

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The dividends paid by a company can be an incredibly important factor for investors when deciding which company to invest in. For instance, they can provide a retiree with a regular flow of income or can give investors wanting to expand their portfolio more capital to invest with.

However, investors should look beyond the company's yield and also consider other factors. For instance, a company's share price might be overvalued and set for a correction, whereby any gains recognised from dividend distributions could be reversed. Other companies may be unable to maintain their payments due to poor operational performance.

Although many Australian blue chip companies pay attractive dividends, some may be best avoided in 2014 due to their strong rallies in 2013, including the big four banks, namely Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). Instead, investors should look towards dividend-paying companies which also have strong growth prospects ahead of them. Here are three companies investors could consider.

Collection House Limited (ASX: CLH): The debt collector is led by a strong management team and has proven its potential after increasing net profit after tax for the full-year in August by 23%. Shares are currently trading in bargain territory at $1.76 on a P/E ratio of 12.3, giving it a market capitalisation of $226 million and a trailing fully franked 4.2% dividend yield.

M2 Telecommunications Group Limited (ASX: MTU) Investors wanting exposure to Australia's booming telecommunications industry should consider M2. So far, it has grown strongly through a number of acquisitions including that of Dodo and Primus, but now looks set to pay off its debts and grow organically. Shares are currently trading at $6.41 each, giving the company a trailing fully franked dividend yield of 3.6%.

Myer (ASX: MYR): While 2013 was a standout year for the retail sector, Myer still presents as an attractive buy. It is increasing its presence online and should continue to benefit from a pickup in consumer confidence as well as the low interest-rate environment. It currently boasts a fully franked 6.4% dividend yield.

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

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