3 dividend stocks I’d buy with $50,000

These top stocks offer more than a regular tax effective income.

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Earlier this week I highlighted how easy it could be for you to double your stock portfolio in 10 years with, what Albert Einstein described as, “the eighth wonder of the world”.

In the article, I used the renowned dividend payer, Telstra Corporation Ltd (ASX: TLS), as a simple example of how your wealth could grow exponentially over time.

If I had $50,000 to invest in dividend stocks today, I would use the same principle I outlined before and look to add a number of reliable companies to my long-term portfolio, with the aim of doubling its size in just 10 years. Here are three I’d buy right now.

1. Entertainment: Village Roadshow Ltd (ASX: VRL). Village does everything from blockbuster movies like The Great Gatsby and cinema exhibitions to the running of iconic tourist attractions such as Warner Bros. Movie World, Sea World, Wet’n’Wild, Paradise County and Outback Spectacular. It trades on a trailing dividend yield of 3.3% fully franked but analysts are expecting its payout to jump in coming years.

2. Food and Beverage: Coca-Cola Amatil Ltd (ASX: CCL) is the exclusive bottler and distributor of products from The Coca-Cola Company to Australia and five neighbouring countries including Indonesia. A price war between Coles and Woolworths and rival Schweppes coupled with ongoing woes for its SPC Ardmona business has resulted in CCA missing earnings guidance. This has taken the fizz out of its shares. However it has provided long-term focused investors an excellent opportunity to buy its stock on the cheap. It trades on a forecast dividend yield of 4.9%.

3. Telecommunications: M2 Group Ltd (ASX: MTU). M2 is the owner of brands such as Dodo, Primus, Eftel and Commander. After a spate of acquisitions, the company is now focused on deriving synergies and paying down debt whilst also growing organically. M2 is one of the most obvious opportunities investors have to invest in a quality company for what it’s going to be, not what it has done. For example, in the near future M2 will become a diversified utility provider; offering everything from an electricity and gas connection to mobile plans, internet and home phones. It is forecast to pay a 4.1% dividend fully franked.

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Each of these dividend stocks are at the top of my buy list and present as viable income alternatives to overpriced big bank stocks. If I were to pick one, it’d be M2 Group.

Wondering where you should invest $1,000 right now?

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