Quality dividend-paying companies should feature prominently in every intelligent investor's portfolio. Once you realise this simple truth it's sensible to stick to some simple rules to deliver the yield appeal.
Choose companies from among the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) for security, choose from different sectors to manage risk through diversity and choose companies with dependable histories of rising dividends. Here are five to consider.
The newly formed Westfield Corp (ASX: WFD) is a quality business with both growth and yield appeal. The growth is expected to come from the development of high profile and futuristic shopping centres in some of the world's leading cities. As a property business the yield is very nice too, with an FY 2014 distribution forecast to be US24.6 cents per security it trades on an FX-adjusted yield of 3.7% based on a $7.48 selling price.
Another business for security and yield is telco, Telstra Corporation Ltd (ASX: TLS). The group is widely expected to payout 29 cents per share in FY 2014, placing it on a fully franked yield of 5.33% when selling for $5.44. Telstra also has a huge pile of cash on its balance sheet, which means the prospect of a share buyback remains on the horizon. This would add further support to a share price already enjoying the benefits of Telstra's growing technology and mobile divisions.
Suncorp Group Ltd (ASX: SUN) is another favourite of income-focused investors, not surprising with analysts' consensus estimates forecasting earnings per share and dividends to grow steadily out to 2016. Analysts forecast dividends per share of 85.2 cents for 2015 placing it on a forward yield of 6.12% at today's prices.
Defensive investors looking for income would also do well to consider supermarket giant Woolworths Limited (ASX: WOW). Its economy of scale means it has formidable competitive advantages, a growth outlook stacked in its favour, and a respectable 3.8% yield for investors to enjoy while waiting for growth.
Infrastructure businesses are also great options for income-seekers with an eye on the future, which is why Sydney Airport Holdings Ltd's (ASX: SYD) 5.3% yield should be on the radar of conservative investors. Sydney is within air range of more than half of the world's population, including large Chinese and wider Asian markets likely to see increased demand for flights from a growing middle class. Domestic air travel is also likely to steadily increase as Qantas Airways Limited (ASX: QAN) and Virgin Australia Holdings Ltd (ASX: VAH) are forced to offer competitive fares to domestic travellers.
One more company every income seeker must know! A grossed-up yield of around 7%… plus double-digit profit growth!
