3 high-yield stocks to buy: Woodside Petroleum Limited, Bendigo and Adelaide Bank Ltd and Australia and New Zealand Banking Group

With Aussie interest rates at just 2.5% and all set to remain at that level (or move lower) over the short to medium term, life is tough as an income investor. However, with the ASX still yielding an impressive 4.5%, there are companies with bright futures paying north of 5%. Here are my favourites.

Woodside Petroleum Limited

2014 has been a strong year for Woodside Petroleum Limited (ASX: WPL), with shares in the oil and gas company rising by 9% since the turn of the year. Despite this, they still yield a very impressive 5.4% (fully franked), with dividends being covered 1.3 times by profit in 2014.

However, there’s more to Woodside Petroleum than a decent yield. Shares in the company offer good value for money right now, with them trading on a P/E ratio of 14.5, which is considerably lower than the ASX’s P/E ratio of 15.8. Furthermore, earnings are set to increase at an annualised rate of 18.9% over the next two years, which means that the company’s price to earnings growth (PEG) ratio is just 0.77. So, as well as a top income play, Woodside Petroleum could turn out to be an attractive growth stock, too.

Bendigo and Adelaide Bank 

Bendigo and Adelaide Bank Ltd (ASX: BEN) has also posted strong gains in 2014, with shares in the bank being up 8% since the turn of the year. However, there could be more to come in the future, since Bendigo and Adelaide is due to increase its bottom line by 11.8% per annum over the next two years. Combined with a P/E ratio of 14.7, this equates to a PEG ratio of 1.25, which is lower than that of the ASX on 1.78.

As with Woodside Petroleum, Bendigo and Adelaide has a great yield. It stands at 5.2% (fully franked) and dividends per share are expected to increase at an annualised rate of 5.7% over the next couple of years, which should mean a real term increase in income for shareholders. This, as well as the company’s earnings growth potential, makes Bendigo and Adelaide a strong prospect.

Australia and New Zealand Banking Group

Unlike Woodside Petroleum and Bendigo and Adelaide, Australia and New Zealand Banking Group (ASX: ANZ) has underperformed the ASX in 2014, being up 3.5% versus 4% for the index. However, it could deliver a better performance moving forward, with the bank all set to increase earnings by 10.7% per annum over the next two years.

In addition, shares in the bank currently trade on a respectable P/E ratio of 13.4 and yield a fully franked 5.1%. With dividends being covered 1.4 times by profit and set to rise by 6.4% per annum over the next two years, ANZ could prove to be a strong income play moving forward.

Of course, ANZ, Woodside Petroleum and Bendigo and Adelaide aren't the only top dividend picks on the ASX. Every year, Motley Fool investment advisor Scott Phillips hand-picks 1 ASX dividend stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.

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