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3 high-yield stocks for a blue-chip retirement

With the Reserve Bank of Australia declaring the most prudent course for monetary policy is likely to be a sustained period of stability in interest rates it looks like the returns available from term deposits are going to be painfully low for a long time yet.

Furthermore, despite the decline in key commodity prices like iron ore this year the Australian dollar remains stubbornly high. This suggests the Reserve Bank is unlikely to raise rates while the Aussie dollar remains far higher than it desires.

Overall, this means if you have any spare cash to invest then the smart option is to buy high-yielding stocks on attractive valuations. The higher income is no use if your capital investment is eroded though and this is why investors should pick stocks on attractive valuations. Here are three to consider below.

AMP Limited (ASX: AMP) just lifted its half-year dividend to 12.5 cents per share 70% franked. Assuming it at least maintains that payout it offers a yield around 4.22%.

Notably, AMP appears to be turning around its previously struggling Wealth Protection business with half-year profit up 42% on the prior corresponding period. This as it does a better job of retaining customers, cutting costs and selectively expanding into key offshore markets. The valuation looks reasonable given that at $5.66 the group trades on around 15x analysts’ estimates for earnings per share of 38.1 cents in FY15.

Macquarie Group Ltd (ASX: MQG) paid out ordinary dividends per share of $2.60 to shareholders in FY14, with analysts’ estimates for that payout to reach $2.94 in the year ahead. That would place the bank on a partially franked yield of 5% when selling for $57.75.

Macquarie is likely to be a prime beneficiary of low interest rates supporting capital market activity and an improving U.S. economy in the year ahead. The Macquarie model of delivering high returns through hard work, innovation and an excellent reputation shouldn’t be underestimated by investors. The bank trades on 13.3x analysts’ estimates for earnings per share of 433 cents in FY15 and also looks decent value given the outlook.

Suncorp Group Ltd (ASX: SUN) is Australia’s fifth largest financial services group with a reputation as a reliable income stock with a brightening outlook. The company is expected by analysts to payout 93.2 cents per share in FY15, which puts it on a prospective 6.33% yield when selling for $14.72.

Recently the business was reported to have been in merger talks with Bank of Queensland Limited (ASX: BOQ) although nothing came of the talks. However, it has also been speculated Suncorp may look to Bendigo and Adelaide Bank Limited (ASX: BEN) as an alternative given the potential scale benefits available to both organisations from a merger.

Suncorp continues to look one of the best options available for investors seeking big fully franked dividends. However, there’s a lesser known stock The Motley Fool has identified which offers a grossed-up yield around 6% at today’s prices! It’s going ex-dividend soon, so it might be worth finding out about now!

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Motley Fool contributor Tom Richardson owns shares in Macquarie Group. You can find him on Twitter @tommyr345

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