Everyone knows that Telstra Corporation Ltd (ASX: TLS) and the four major banks offer some of the best fully franked dividends around. There is however other blue chip stocks that not only have high, historic, fully franked dividend yields but that also offer the potential for higher capital growth and higher dividend growth.
Here are 5 such stocks that you might want to consider adding to your portfolio.
1) Insurance Australia Group Limited (ASX: IAG) has a historic yield of 6.6% and is trading on a multiple lower than many of its peers which could mean there is upside in the stock price too.
2) Seven West Media Ltd (ASX: SWM) is trading on a trailing yield of 6.5%. With its share price trading close to its 52-week low, it might not take much of a boost in investor enthusiasm for this media stock to send the share price higher.
3) Bendigo and Adelaide Bank Limited (ASX: BEN) has a yield of 5.4%. Investing outside of the big four banks provides the opportunity for shareholders to benefit from the potential consolidation of the banking sector which may become more appealing to the ‘Big 4’ as organic growth slows.
4) Tatts Group Limited (ASX: TTS) is currently trading on an historic yield of 5.1%. Tatts’ monopoly assets provide an appealing defensive revenue base with the ability to raise prices at a rate greater than inflation.
5) ASX Ltd (ASX: ASX) also offers a healthy fully franked dividend to shareholders with a trailing yield of 4.8%. The ASX’s asset base is highly appealing as it attracts a steady stream of revenues and enjoys significant leverage to higher trading volumes and new capital issues.
Adding high yielding stocks to your portfolio is of course appealing if you are seeking income – particularly given the benefits that franking credits provide – however investors should not neglect the opportunity to benefit from capital gains at the expense of seeking out dividends.