As expected, the Reserve Bank of Australia kept interest rates on hold at their record low of 2.5% yesterday while confirming that low rates are here to stay for the foreseeable future. While that's great news for consumers and businesses with heavy debt loads, it comes as a huge blow for retirees who often rely on interest payments as a regular source of income.
One of the best ways to overcome this problem is by investing in solid, high-yielding dividend stocks. These dividends can not only provide a regular source of income, but the proceeds can far outweigh the alternative returns from term deposits or other savings accounts, where you'd be lucky to earn 3% per annum.
Here are three strong blue-chip stocks that not only offer extremely appealing dividends, but are also more than capable of delivering decent capital gains in the coming years too.
Coca-Cola Amatil Ltd (ASX: CCL) is arguably one of the best blue-chip stocks you could be buying right now. To begin with, it is expected to distribute 46.5 cents per share in FY15 which equates to a 5% dividend yield, franked to 75%. The shares are also trading near their lowest level since 2009 due to short-term macroeconomic headwinds, but the company's long-term outlook remains well and truly intact. I currently own shares in Coca-Cola Amatil, and am strongly considering increasing my stake in the near future.
Telstra Corporation Ltd (ASX: TLS) and M2 Group Ltd (ASX: MTU) are both great ways for investors to gain exposure to Australia's booming telecommunications industry. While both offer bumper, fully franked yields, M2 Group appears the better bet for today's money given its fantastic growth potential. Based on estimates for 2015, the stock is yielding 3.9%, fully franked. Grossed up, that's a massive 5.6% dividend yield.
Westfield Corp (ASX: WFD) is also a solid bet for retirees looking to boost their income stream. Offering fantastic exposure to the recovering US and UK economies, the shopping centre giant is also expected to distribute US24.6 cents per share. In today's currency translation, that equates to 26 Australian cents giving it a yield of 3.6%. It should be noted that the yield will increase if the Aussie dollar drops against the US greenback.
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Coca-Cola Amatil, M2 Group and Westfield Corp would all make for excellent additions to your portfolio today. While I expect the shares will climb in price in the years to come, they will all pay very decent dividends along the way.
