3 of the best large-cap dividend stocks to buy today

Not all yields are created equally.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Stock market traders love to come up with little ‘rules’ to guide them through the ups and downs of the market. One of those catchphrases is the adage – “Sell in May and go away.” Historical precedents and patterns often form the basis for these strategies – this one is thought to have some foundation in the Northern Hemisphere’s summer leading to lighter volumes during the holidays. According to the Stock Trader’s Almanac since 1950, the Dow Jones Index has returned an average of just 0.3% during the May-October “go away” period, compared with a 7.5% return on average for the November-April period.

While I’m not suggesting the “Sell in May and go away” adage is a strategy worth taking to heart, it is a reminder that before long winter (or summer depending on your hemisphere) will be over, November will be upon us and investors will be focused on the 2015 financial year (FY). With a view to FY 2015, the following three large companies are all trading on attractive forecast dividend yields.

The $7 billion Coca-Cola Amatil Ltd (ASX: CCL) has fallen out-of-favour with investors in recent times. While their concerns around slowing growth rates and increased competition appear justified; a forecast dividend of 51 cents per share in FY 2015 and the knocked down share price means the stock is trading on a partially franked dividend yield of 5.4%

SP AusNet (ASX: SPN) is a $4.7 billion owner and operator of electricity and gas distribution assets. With a forecast partially franked dividend of 8.6 cents per share in FY 2015, the stock is trading on a yield of 6.2%

The Australian focussed Westfield Retail Trust (ASX: WRT) provides shareholders with exposure to around 46 major shopping centres. With expectations for an unfranked dividend of 20.8 cents per share to be paid in FY 2015, the stock is trading on a forecast dividend yield of 6.5%.

 

Foolish takeaway

While the banks certainly do offer enticing fully franked dividend yields, there are risks involved with owning banks that many investors appear to be either oblivious or indifferent to. Investors should remember that not all yields are created equally and realise that there is always a risk versus reward trade-off when investing.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »