As investors what we want is different to what we need. Some of us will want to take on significant risk and invest in the small-cap space, with ambitions to double or triple our investments' value over time.
However, meeting our needs with a few sensible blue-chip investments will generally return a higher level of happiness, than risking losing a substantial proportion of our invested capital chasing something we are told we should want.
With returns from cash-based investments currently so low, smart equity investors will be looking to steadily grow their capital and receive a steady income. This may be as they need to pay their children's school fees, pay for regular holidays, or feel comfortable in retirement.
Here are four dividend-paying stocks to meet your everyday needs.
Telecommunications giant Telstra Corporation Ltd (ASX: TLS) is famous for its generous distributions to shareholders. That distribution currently sits at 28 cents per share, placing it on a trailing yield of 5.35% fully franked. Appealingly, there is the prospect of the group increasing that distribution in financial-year (FY) 2014 and Morningstar's analyst consensus is predicting the payout to reach 31 cents per share in FY 2015, as the group's impressive cash hoard continues to grow.
Telstra has been winning the most new mobile customers, thanks in part to its superior network coverage. The mobile market is likely to grow fastest, because of the ongoing explosion in mobile data demand and use. I won't be surprised to see a 6 in front of Telstra's share price come 2015.
Shares in shopping-centre giant Westfield Retail Trust (ASX: WRT) are currently trading on an unfranked trailing yield of 6.34%, with the dividend expected to rise in the 2014 financial year. Westfield's cathedrals to the consumer age, act as destination centres – sailing through the the online headwinds by generating annual retail sales of $22 billion and 555 million annual customer visits. The development pipeline includes $3 billion of multiple future projects and I feel the group is streets ahead of the competition.
Retailing peers like David Jones Limited (ASX: DJS) and Myer Holdings Ltd also pay healthy dividends, but shopping at their stores feels like travelling back 30 years in time to me. Their share prices saw strong gains in 2013, but in reality those prices were simply returning to where they were roughly two years ago. I suspect in two years' time they will have travelled further sideways as Westfield continues to impress.
Insurance Australia Group Limited (ASX: IAG) paid a 36 cent fully franked dividend in the 2013 financial year, a dividend yield of 6.3% on today's price of $5.67. The group owns quality brands like NRMA and doubled its dividend in the last financial year. The future is hard to predict for insurers but it pays the best dividend amongst its peers.
A low-risk business model and resilient cash flows have seen Sydney Airport Holdings Ltd (ASX: SYD) investors well rewarded over time. Passenger numbers are leveraged to economic cycles, but it still looks a very solid long-term growth prospect. It has a trailing dividend yield of 5.8% at the current price of $3.86. As a bonus, the dividend is expected to rise slightly in 2014.
Foolish takeaway
In life it's easy to confuse what we want with what we need. It's an important distinction though, as what we need is actually far more important than what we want. So get what you need with the above investment ideas and discover the name of the Motley Fool's top dividend-paying stock below.
