No matter what your goals in retirement, chances are you'd want a generous income from your investments coupled with the peace of mind you get from knowing your money is invested in a mostly safe and reliable company. National Australia Bank Ltd (ASX: NAB) and BHP Billiton Limited (ASX: BHP) are examples of companies with generous dividend yields. However their share price performances over the past five years has resulted in more sleepless nights than many investors would care to admit.
The good news is there are a number of other well priced reliable dividend stocks on the ASX which you should consider buying and holding for long-term capital gains and income. For example, retail telecommunications player M2 Group Ltd (ASX: MTU) looks primed for market outperformance in coming years, despite increasing some 700% in value over the past five years.
As the owner of Dodo, Primus, Eftel and Commander, M2 has grown earnings per share acquisitively but with debt levels now quite high, M2 has shifted tact to growing organically via the introduction of other bundled utilities such as power and gas. It trades on a forward P/E ratio of 12 and dividend yield of 3.8% fully franked.
Another extremely successful Australian company with a growing customer base is ResMed Inc. (ASX: RMD). ResMed develops and markets products for the management of respiratory disorders. With more and more individuals seeking help for disorders such as sleep apnoea, ResMed's market is still growing strongly. Whilst it might not seem like much, its 1.8% dividend can be expected to grow in coming years along with increased earnings.
Macquarie Group Ltd (ASX: MQG) is another blue-chip ASX stock with long-term potential and a growing demand for its services. Like Australia and New Zealand Banking Group (ASX: ANZ), Macquarie has a heavy focus on Asia's rising middle-class, but is also busy expanding its specialist knowledge in areas such as commodities, M&A, mortgages, banking and funds management. It trades on a P/E ratio of 16 and forecast dividend yield of 4.8% .
