The share prices of Australia and New Zealand Banking Group (ASX: ANZ), Telstra Corporation Ltd (ASX:TLS) and Macquarie Group Ltd (ASX:MQG) have risen exceptionally well over the past three years. They're up 68%, 80% and 127%, respectively, before dividends.
By comparison, the S&P/ASX 200 (INDEXASX:XJO) has jumped 37%.
ANZ Banking Group
ANZ is, unlike its major bank peers, actively expanding its presence throughout much of Asia with both organic and acquisitive growth. It is also the most efficient lender of money amongst its peers (on a net interest margin basis), and ANZ's CEO Mike Smith has recognised the unique opportunities presented throughout Asia. He hopes the bank will draw between 25% and 30% of revenues from Asia, the Pacific, Europe and Americas markets (APEA) by 2017.
So far the bank is progressing well with over 19% of FX-adjusted cash earnings derived from overseas markets. Whilst Smith's strategy appears promising, it's also a risky manoeuvre given the track record of Australian companies venturing overseas. But it appears analysts are expecting big things from the bank in coming years with Morningstar's analysts' consensus tipping earnings per share will grow to $2.77 by 2016.
Telstra Corporation
Telstra CEO David Thodey also has an ambitious strategy to grow his company in Asia, with a target of one-third of revenues to be derived from the region by 2020. It plans to do so by investing in infrastructure and forming joint venture partnerships with existing telcos in the region.
Whilst it's too early to tell whether, or not, the strategy will be successful, the company continues to dominate the local telecommunications sector. It focuses on its customer service and superior network capabilities, to provide a healthy platform to leverage its overseas growth. What's more, with a recent increase to its final dividend, Telstra shares trade on a trailing yield of 5.3% fully franked.
Macquarie Group
Unlike ANZ and Telstra, Macquarie is already a major player in overseas financial markets. In FY14, 68% of income was derived outside Australia and New Zealand and it has proven to be an extremely rewarding cyclical investment for astute investors wanting overseas equity market exposure.
Whilst earnings are largely dependent on conditions in global markets, management has provided guidance of broadly higher profit in FY15, depending on market conditions. In the long term Macquarie hopes to increase its exposure to the domestic mortgage market, grow its funds management business and capitalise on increased market activity such as M&A. It is forecast to pay a 5% dividend with partial franking in the next 12 months.
Buy, Hold or Sell?
Each of these quality blue-chip companies appear likely to reward long-term shareholders with generous dividend payouts. However, I believe none are a standout buy at today's prices and investors should wait for a lower entry point before hitting the buy button. Instead, investors should keep on the lookout for other, cheaper, big dividend stocks to buy right now (see below).
