As we wrote earlier in the week, history has proven the average returns from the stockmarket have far outpaced those from cash and various other investment classes over the last century, and that will continue to be the case well into the future.
One of the best ways to pump up your sharemarket returns is by investing in high-yielding dividend stocks. The combination of an increasing stock price and a reliable (and increasing) dividend can truly be exciting.
If I had $10,000 to invest and was focusing solely on stocks that offer strong dividend yields, here are the four I would be buying today.
1. Skycity Entertainment Group Limited-Ord (ASX: SKC) operates in the gaming and entertainment industry and, based on Morningstar's analysts' forecasts, yields a solid 5.7%. In comparison, Crown Resorts Ltd (ASX: CWN) offers a 2.4% dividend yield. Skycity owns and operates three casinos in New Zealand and one each in Darwin and Adelaide, while it is relatively protected from competition thanks to strict licensing rules.
2. JB Hi-Fi Limited (ASX: JBH) has been put in the bargain bin this year and has heavily underperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) thanks to a decline in consumer confidence. Despite the near-term headwinds, Australia's go-to retailer maintains decent medium-to-long term growth prospects thanks to its new 'Home' format stores. The company has proven its resilience, having consistently grown sales over the last 12 years (even through the GFC), and is expected to continue growing earnings strongly over the coming years. The stock yields 4%, fully franked.
3. Silver Chef Limited (ASX: SIV) is a small-cap business finance company which is looking particularly compelling given that its shares are sitting 33% below their 52-week high. After issuing a shock profit warning late last year, the company appears to be well and truly back on track having implemented initiatives to stimulate growth in its GoGetta division. With a market capitalisation of just $177 million, it also boasts a fully franked 4.7% dividend yield.
4. Telstra Corporation Ltd (ASX: TLS) is Australia's largest and most reliable telecommunications provider. While investors should not expect the stock to double in price any time soon (it already boasts a market capitalisation of $67.4 billion), Telstra should continue to benefit from Australia's growing reliance on broadband services, while the company also hopes to grow earnings strongly in Asian markets in the coming years. It offers a mouth-watering 5.4% fully franked dividend yield.
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Each of the companies mentioned above have the potential to deliver market-beating returns over the coming years, and while I don't own any of them currently, they are all sitting firmly on my watchlist.
