Dividend yields are beginning to climb as the market declines. It may be time to get a little greedy when others are a bit fearful, like billionaire Warren Buffett advises when the market sells off.
With share prices sagging, these four high-yield stocks look more compelling for dividend income.
1) Skilled Group Ltd. (ASX: SKE) is a staffing solutions service provider for the private and public sector. It has a low 10 PE and now sports a 7.3% fully franked yield. It's expected to grow earnings and is just above its 52-week low.
2) Mortgage Choice Limited (ASX: MOC) is a leading non-bank residential mortgage broker that helps buyers compare the best available home loans. The rising housing market means more demand for lending, so the company should benefit. It yields a hefty 5.8% fully franked.
3) Sydney Airport Limited (ASX: SYD) operates Sydney Airport. Until the proposed second airport is running a number of years from now, this company has the only international airport in NSW. They also have the first right to take over the second airport as well, so what could be better! It offers an unfranked 5.3% yield, but has a 55 PE right now. The company story is compelling, but not the price tag. Definitely wait for a correction on this one.
4) McMillan Shakespeare Limited (ASX: MMS) runs a salary packaging, novated leasing and fleet vehicle management business. It has a 4.9% yield fully franked and a 14 PE, which isn't overly expensive. It's still recovering from the former Labor government's proposal to change fringe benefit tax calculations, which would have severely disrupted the company. The change was scrapped, so this could be an opportunity to pick up a good company before it fully recovers from a temporary setback. I have been watching this one since last September and it's getting interesting now.
I would go with McMillan Shakespeare because its business is probably the best money spinner within this group. These four aren't the best stocks that are attracting the attention of The Motley Fool's top analyst, Scott Phillips, though. He recently identified one cheap but growing ASX stock with a 6% grossed-up dividend yield.
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