5 incredible dividend stocks you need to know about

Here's why you can't afford to let these opportunities slip away.

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We Australians love our dividends.

And why shouldn't we? They provide a steady and reliable stream of income, often come with tax benefits (in the form of franking credits) and are currently offering far greater returns than what could otherwise be earned from investing in a term deposit or government bonds.

However, most of the traditional stocks everyday investors turn to for these dividends, such as the big four banks, Woolworths Limited (ASX: WOW) or Wesfarmers Ltd (ASX: WES) have become overpriced and should not be bought today. So where should you go instead?

Here are five alternatives which would be excellent buys at today's prices – not only for their dividends, but also for their solid growth prospects:

Insurance Australia Group Limited (ASX: IAG): You may want to move quickly, because I doubt IAG will be trading at these levels for much longer. While its shares are moving in an upwards trend, it currently offers a 6.2% fully franked dividend yield which will only decrease as the stock price climbs higher. The company is a clear standout in the insurance industry, having reported a 39% increase in net profit for the six-months ending December 2013 and looks set for another bumper year this year.

Westfield Retail Trust (ASX: WRT): Still trading well below its book value, Westfield Retail is certainly a stock to consider – particularly as it offers a 6.3% dividend yield at just $3.17 a share. The company has excellent exposure to the Australian retail sector which is set to improve as business and consumer confidence rise.

Telstra Corporation Ltd (ASX: TLS): Like the big four banks and supermarket giants, Telstra's shares have soared as investors have sought out high yielding stocks to offset low returns from other asset classes. The difference is, Telstra's shares are still extremely appealing at today's price of $5.19. It still boasts plenty of growth potential and offers an incredible fully franked 5.5% dividend.

Collection House Limited (ASX: CLH): The receivables management group is one of my favourite companies on the ASX today. In addition to offering a bumper 4.1% fully franked dividend yield, it has plenty of potential to grow exponentially as more and more companies outsource their debt collection tasks. The company recently announced that it would be expanding its office space by 50%, reflecting its confidence of winning much larger contracts in the years to come.

Coca-Cola Amatil Ltd (ASX: CCL): Given the problems facing the company as of late, I have recently bought shares hoping to take advantage of their current 5.5% dividend yield. The shares are currently sitting near a six-year low on the back of declining profits, but the problems appear to be short-term in nature. I have strong faith in the company's management team to turn things around in the medium-to-long run.

Foolish takeaway

While I currently have a financial interest in Collection House and Coca-Cola Amatil, I am strongly considering adding Telstra and Insurance Australia Group to my hoard. However, there is another company which I am also highly intrigued by….

Motley Fool contributor Ryan Newman owns shares in Collection House Limited and Coca-Cola Amatil Ltd.

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