News overnight that the European Central Bank (ECB) is preparing to fight low inflation that is hampering the EU’s recovery by lowering interest rates is a reminder that the global economic recovery is still fragile.
The economic climate in Australia, while certainly not as dire as the EU, is still far from stellar and although expectations suggest that the rate cutting cycle is done, a significant move up in interest rates is probably some time off yet.
Low interest rates are bad news for savers who rely on interest from their bank account for income; however investors who are prepared to buy dividend-paying stocks still have some great choices for securing juicy yields.
AMP Limited (ASX: AMP) is trading on a forecast yield for financial year (FY) 2015 of 5.1%. With a tailwind in financial services and an expected turnaround in wealth protection, the dividend is forecast to rise at a steady clip in FY 2016.
Origin Energy Limited’s (ASX: ORG) FY 2015 forecast yield of 3.2% might look a little skinny to some, however with the ramp-up of production in LNG projects the dividend is forecast to rise by 28% in FY 2016.
Tabcorp Holdings Limited (ASX: TAH) and Tatts Group Limited (ASX: TTS) control a significant portion of the gaming, wagering and lotteries industry across Australia. One of the beauties of their businesses is the reliability and predictability of their revenues and earnings. In turn this makes the dividends received by shareholders predictable too. Tabcorp and Tatts are current trading on forecast FY 2015 fully franked dividend yields of 4.7% and 5.2% respectively.