One of the best things about Aussie blue-chip stocks is their tendency to pay fully franked dividends. It mightn't sound that good but when you combine a regular tax-effective income with market-beating capital gains (remember capital gains taxes are cut in half once you hold an investment for a year or more), the results are excellent.
In the next year many blue-chip stocks included in S&P/ASX 200 Index (ASX: XJO) (INDEX: ^AXJO) are forecast to grow profits and pay generous fully franked dividends. Three at the top of many investors' watchlists are Telstra Corporation Ltd (ASX: TLS), Macquarie Group Ltd (ASX: MQG) and Woodside Petroleum Limited (ASX: WPL).
Telstra, a long-time dividend payer, is forecast by analysts to up its dividend payout to 29 cents per share fully franked in the next 12 months, putting it on a forecast dividend yield of 5.3% fully franked.
Macquarie, our biggest investment bank, is tipped to grow earnings and dividends this year following a stellar FY14 performance which saw it return a spectacular regular dividend and "special" dividend payment. It is forecast to pay a dividend equivalent to 4.97% of its current market price.
Lastly oil and gas giant, Woodside Petroleum, is forecast to pay out an impressive dividend of over 6% fully franked, following management's decision to withdraw from the giant Leviathan gas field off the coast of Israel and buy back shares.
As you can see there are many stocks which provide an opportunity to minimise your taxation liability and grow your wealth over time. By identifying growing companies with a tendency to return excess funds to shareholders you maximise your chances of setting yourself up for a profitable investing experience.
Should you buy these 3 companies now?
As all of these companies' share prices continue to climb higher, I'm (obviously) finding less and less value in them. As such I think Telstra and Woodside operate around fair value. Whilst I think Macquarie could have further to run in the short to medium term, however its gains will depend largely on confidence in global markets. But, the good news is, with over 2,000 companies listed on the Australian Stock Exchange, there are other more compelling 'Buy' ideas you can invest in today.
