According to Shane Oliver the Chief Economist at insurer AMP Limited (ASX: AMP) the next move in Australia’s official interest rates could actually be down, not up as most investors are expecting. With a drop in consumer confidence in the wake of a tight Federal Budget, an employment picture that is far from rosy and a continued drop in spending from the mining sector, the potential for a slowdown in the Australian economy and a further cut to interest rates shouldn’t be ruled out.
With rates at record lows, times like these have encouraged investors to seek out high dividend-yielding stocks. Almost amazingly, despite the quantity of money chasing income-stocks, there are still a number of appealing opportunities available.
K2 Asset Management Holdings Ltd (ASX: KAM)
The Melbourne-based boutique funds manager paid a dividend of six cents per share (cps) in FY 2013. Last year’s dividend has already been matched in the first half of FY 2014 with one consensus forecast suggesting a total of 7.7 cps will be paid in FY 2014. Based on that forecast, shareholders in K2 own a stock which is currently yielding 10.6%, but investors do need to be aware that performance fees play a role in determining the earnings base of K2.
Data#3 Limited (ASX: DTL)
Like many of its peers in the IT services sector, Data#3 has been struggling in an environment where customers have been delaying their spending. At some point it can be expected that industry revenues will start to grow again, until then shareholders are enjoying a forecast FY 2014 dividend yield of 7.7%.
Wotif.com Holdings Limited (ASX: WTF)
While the jury appears to still be out on the future for online travel agents such as Wotif.com and Webjet Limited (ASX: WEB) with their share prices trading at lows, analysts are still forecasting a steady stream of dividends from Wotif.com. In FY 2014 dividends per share are forecast to total 19.2 cps which implies the stock is trading on a yield of 7.7%.