As I noted in an article earlier today, the banks have been the go to place for self-managed super funds (SMSFs) and retail investors for high dividend yields in recent years.
But with their share prices crashing through all-time highs on a regular basis, investors may want to consider three retail companies that can offer juicy fully-franked dividends. With the market – S&P/ASX 200 Index (Index; ^AXJO) (ASX: XJO) paying around 4.2%, investors could generate yields of more than 50% higher.
Myer Holdings Limited (ASX: MYR)
The department store retailer is paying a fully-franked dividend yield of 7.4%, according to Commsec, although dividends may fall this financial year, on the back of lower earnings per share. The retailer is also suffering from increased competition from a wave of international arrivals like ASOS, H&M, Zara and Topshop, not to mention a formidable competitor in David Jones Limited (ASX: DJS). If the company can continue to differentiate its offering, there may be value in this stock at current prices.
RCG Corporation Limited (ASX: RCG)
The owner of Athlete’s Foot shoe stores and the exclusive rights to distribute several well-known fashion brands including Merrell, Saucony and CAT is paying a 6.1% dividend (franked to 75%). Earnings and dividends are expected to grow, and the stock could be a bargain at current prices.
Gale Pacific Ltd (ASX: GAP)
Currently paying a fully-franked dividend yield of over 10%, Gale Pacific has seen its share price crumble – down 22% over the past 12 months, as its largest division, Australasia, has failed to perform. The company, known for its Coolaroo shade sails, is forecasting a better second half, after implementing a number of changes to cut costs and improve performance in this division. That could even see dividends rise.
If none of these stocks tickle your fancy, how about two ASX stocks that investing legend Warren Buffett would appreciate.