Add these top 10 mid-cap income stocks to your portfolio

The ASX website is a great source of information for investors. There’s a huge resource of learning material available for both new and experienced investors on all kinds of topics, including managed and exchanged traded funds, options and other derivatives training, as well as share price and news releases information.

Investors that subscribe to the website also receive a great monthly newsletter that has some interesting articles and stock picks. This month’s article features an analysis of the top 10 mid-cap stocks for income-focussed investors.

Companies with the right stuff

The article explains three main factors to look for when in search of income:

  1. A mature and healthy business that has a strong history of growing earning per share and consistently making profits. Companies that pay tax in Australia will also pay out franking credits which boost real dividend returns.
  2. The company should have strong free cashflow that can be paid out as dividends. A stable and growing positive cashflow is key for reliable dividends and preservation of capital.
  3. Companies that are set up as a trust, such as real estate investment trusts, can be a great way of boosting returns. Trusts are required to distribute all cash to investors and can benefit from favourable tax treatment.

10 Top Mid-caps for Income

The article lists the following ten stocks as having impressive dividends, earnings per share growth, and futures:

BWP Trust (ASX: BWP), 6.2% gross yield

Cromwell Group (ASX: CMW), 8.1% gross yield

Spark Infrastructure Group (ASX: SKI), 6.9% gross yield

Ardent Leisure Group (ASX: AAD), 5.3% gross yield

RCG Corporation Limited (ASX: RCG), 7.6% gross yield

Bank of Queensland Limited (ASX: BOQ), 7.1% gross yield

FlexiGroup Limited (ASX: FLX), 6.0% gross yield

Woodside Petroleum Limited (ASX: WPL), 8.3% gross yield

BC Iron Limited (ASX: BCI), 16.3% gross yield

Mineral Resources Limited (ASX: MIN), 8.43% gross yield

The 10 stocks are from a wide range of industries and come with varying levels of risk, but will provide investors with a great income source above that of most large cap stocks.

We're found another great dividend stocks! Discover The Motley Fool's favourite income idea for 2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2014."

Motley Fool contributor Andrew Mudie owns shares in FLX. You can find Andrew on Twitter @andrewmudie

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