With term deposits offering rates as low as 3%, now is the best time to grab some solid dividend stocks offering good yields. As I’ve previously mentioned, investors should always try to look for companies that have bright future prospects and can therefore sustain their high yields.
Here are four companies that offer compelling long-term growth prospects, in addition to some tasty dividend yields and I think all investors should keep these stocks on their watchlist.
Collins Foods Ltd (ASX: CKF) owns and operates well known names such as KFC and Sizzler restaurants throughout Australia and Asia. It currently provides a generous 4.8% fully franked dividend yield. To support this high yield, Collins Foods has recently completed a chain of acquisitions to give it that extra spice. Its purchase of 44 successful KFC stores in 2013 will also allow it to retain a more dominant market position in an increasingly competitive industry. Given its growth and dividend prospects, I think Collins Foods is a fair bet for your money.
2. Atlas Iron Limited (ASX: AGO) has been smashed this week as it hit a 52-week low. The share price fall comes after continuing downward pressure on the iron ore price, falling to record low levels. I think its sell-off represents anxious short-term investors trying to get out of what they think is a bad investment. But looking deeper, Atlas Iron has engaged in strict cost-cutting programs and restructurings, allowing it to modestly reduce its production costs. At its current cost level, the iron ore price would have to dip below $50 per tonne for its profitability to be extinguished. Atlas Iron offers a 4% dividend yield and I think long-term investors should keep a close eye on it.
3. My favourite telecommunication company M2 Group Ltd (ASX: MTU) is the owner of brands such as Dodo, Primus, Commander and Eftel. Shares have skyrocketed since I first recommended it to investors, but I think there’s still plenty more room for growth. M2 has recently completed its negotiation of the Telstra Wholesale agreement which seems both commercially and economically viable. In addition, it has entered the power and gas bundled services business and aims to provide discounts to households. M2 offers a tasty 3.8% fully franked dividend yield and given its growth prospects, I think investors should consider buying.
4. Hansen Technologies Limited (ASX: HSN) provides utility, billing and smart metering solutions for the electricity, gas and telecommunication sectors. It currently offers investors an attractive 4% fully franked dividend yield. Hansen’s most recent contract with DIRECTTV Latin America has been by far its greatest accomplishment this year. The contract provides it with a seven-year licensing agreement of its Customer Care and Billing solutions. Despite recent gains, Hansen trades on a modest price-to-earnings ratio of 16.5. I think Hansen is an ideal candidate for investors looking to reap some solid dividend yields.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Aryan Norozi does not own shares in any of the companies mentioned in this article.