The Motley Fool

These 5 dividend plays should be in your portfolio

As recently as 18 months ago investors wanting solid dividend payments would have invested in one of the big four banks or one of the supermarket behemoths – all of which are known for their strength and bumper dividends.

Times have changed though as the lemming effect means many of the ‘safest’, high-yield stocks have become overpriced. So where should investors go now for delicious dividends? Here are five companies to consider:

OrotonGroup Limited (ASX: ORL): Current Price – $4.04; yield 8.4% fully franked

The company’s shares have plummeted over the last 12 months following the loss of the key contract with Ralph Lauren, but seem to have stabilised since the beginning of March. They have signed on two new brands including Brooks Brothers and US clothing retailer GAP, this should give shareholders plenty to smile about in the medium-to-long term.

NIB Holdings Limited (ASX: NHF): Current Price – $2.71; yield 3.6% fully franked

The insurance group presents as an excellent long-term prospect with continued strong performance. Although it recently increased its health insurance premiums, NIB remains one of the nation’s most affordable health funds which should continue to attract customers going forward. The company will also keep on benefiting from a low interest rate environment, population growth, and mounting concerns regarding the public hospital system.

The Reject Shop Limited (ASX: TRS): Current Price – $10.12; yield 3.4% fully franked

The low-margin retailer had a disastrous Christmas period which led to a 16% decrease in first-half net profit and a whopping 41% drop in share price. However, the company maintains a strong balance sheet and cash flows, and has reviewed ways to improve its performance going forward. Long-term shareholders should be well rewarded.

JB Hi-Fi Limited (ASX: JBH): Current Price – $20.99; yield 3.7% fully franked

Investors have (justifiably) been cautious of retail stocks due to the rapidly expanding online retail sector. However, given the electronic goods retailer’s low-cost business model, it has continually delivered impressive results. These include a 10% increase in underlying net profit and a 6.8% increase in total revenue in its first-half operations in a somewhat challenging retail environment. The company should benefit as consumer confidence and spending builds.

Amcor Limited (ASX: AMC): Current Price – $9.99; yield 4%

The global packaging company is well-placed to grow its operations in emerging economies following its demerger from its Australasian and Packaging Distribution group Orora Ltd (ASX: ORA). While the company reported a solid 21.2% increase in profit after tax for its first-half operations, it will also benefit further when the Aussie dollar pulls back again.

Foolish takeaway

All the companies mentioned have strong potential to deliver solid gains for years to come. If not in your portfolio, they should be on your watchlist.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Ryan Newman owns shares in NIB Holdings Limited.

Related Articles...

Latest posts by Ryan Newman (see all)