2 big stocks paying huge dividend yields over 5%

Give your portfolio that extra oomph in income.

| More on:

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

Nothing warms an investor’s heart like getting paid a dividend. It’s that little perk you get while you wait for a share price to go up. With interest rates low, bank deposit accounts don’t pay high interest, so there’s no warmth there.

For long-term investors, a good portion of their future returns may come from dividend income, so all those cents per share over the years can add up and give you even more capital to invest with.

Let’s look at two stocks paying a dividend yield over 5% that could help you build a strong financial future.

Telstra Corporation Ltd (ASX: TLS)

The telecom giant is the biggest mobile phone and broadband service operator and is a 50% owner of Foxtel pay TV along with Twenty-First Century Fox Inc (ASX: FOX). It has over 15 million mobile users and operates Bigpond, the largest network of home internet users.

Its share price hit a 52-week high of $5.36 this week, yet it still has a high dividend yield of 5.4%. After years of having a rock solid 28 cents per share annual dividend, it upped the interim dividend to 14.5 cps, making shareholders even happier.

One way the company plans to drive revenue is by leasing out its existing copper network infrastructure for the rollout of the national broadband network. That will pay the company hundreds of millions of dollars annually for many years, helping earnings and dividend growth.

Woodside Petroleum Limited (ASX: WPL)

The $33 billion oil and gas producer’s stock is offering a 5.7% dividend yield currently. In 2013, it gave shareholders a special dividend of US$0.63 a share along with a US$1.03 a share final dividend. New investors who missed out on receiving that may have another chance.

The company just announced that it will stop its plan to be part of the Leviathan LNG project, located offshore near Israel. The investment was to be around US$2.5 billion. The progress of the plan was not going the way it wanted, so it pulled out.

This means funds are free for other potential acquisitions. However, if there isn’t much merger and acquisition activity in the near-term, CitiGroup analyst Dale Koenders speculates that the company could potentially pay out another special dividend.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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

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 »