Banks are known for their stable earnings and bigger than average dividend yields. That’s why they remain attractive stock picks for dividend-seeking investors.
But they’re not the only ones that pay handsome yields and grow dividends over time. In fact, some big name stocks have yields that either match or solidly beat the Big Four banks’ yields. Currently, National Australia Bank Ltd. (ASX: NAB) leads the banks with a 5.7% yield and Commonwealth Bank of Australia (ASX: CBA) brings up the rear with a 4.6% yield.
Here are three well known stocks that rival the yields of the Big Four banks and have attractive growth prospects over the next 1 – 3 years.
Coca-Cola Amatil Ltd (ASX: CCL), the exclusive bottler and distributor of Coca-Cola in Australia, fell in share price suddenly in April when it announced an expected earnings decrease. That pushed its dividend yield up to a fat 5.2% partially franked.
Since the company is conducting a business restructure, we may see more earnings from cost cutting, but it could also result in a weaker share price along the way. If so, its yield could potentially rise more before the restructure benefits are realised. Having a starting position in Coca-Cola Amatil is an option and you can adjust the position as the restructuring proceeds.
Woodside Petroleum Limited (ASX: WPL) is beginning to make news about new oil and gas regions in Africa it is buying into for its development pipeline. The market was concerned there wasn’t a lot of new production coming online in the near-term and the stock has been flat since May.
That is giving investors a longer chance to take advantage of its big 5.8% fully franked yield. However, the company should be reporting its interim report this week, so it will be very interesting to see if any new announcements push the share price above its recent $42.23 multi-year high.
Stockland Corporation Ltd (ASX: SGP) is a commercial and residential property developer sporting a 5.8% yield unfranked. The recent housing market growth is driving sales and FY 2014 full year results out just this week show a 12.2% gain in underlying net profit up to $555 million. Developments of shopping centres and retirement villages are also doing well.
The company is expanding into unit dwelling construction because more people are considering units for homes in cities rather than just heading to the suburbs. The rise in housing prices may slow a little, but with historically low interest rates, property buyers will continue purchasing. That potentially means more business and growth for Stockland.
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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.
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