Although a number of financial services stocks have delivered superb growth over the last five years, the dividend yields on offer within the industry are still extremely attractive.
For example, the insurance sector currently yields a hugely impressive 4.2%, while the banking sector offers an even higher yield at 5.2%.
Both of these figures are well ahead of interest rates and inflation, and offer the chance for Aussie investors to boost their incomes almost immediately.
With that in mind, here are three financial services stocks that have delivered exceptional share price gains and yet still offer superb dividend yields. In fact, they all come with higher yields than their respective sectors.
Insurance Australia Ltd
Despite Insurance Australia Ltd (ASX: IAG) seeing its share price rise by an incredible 72% over the last five years, it still offers a fat, fully franked yield of 5.9%, which undoubtedly appeals to a large number of investors.
However, IAG also offers much more than a great yield. That's because with a beta of just 0.5, it could deliver a less volatile shareholder experience than the wider market. And, with the ASX having been hugely volatile in recent months, this could be worth a great deal to investors who do not wish to see their portfolio value chop and change as rapidly as it has been doing.
In addition, with shares in IAG trading on a P/E ratio of just 12.1 (versus 15.5 for the ASX) they seem to offer scope for an upward re-rating, too.
Suncorp Group Ltd
As with IAG, Suncorp Group Ltd's (ASX: SUN) yield is also sector-beating, with it currently being a whopping 5.7%.
The main difference between the two insurance plays, though, is with regard to their ratings. As mentioned, IAG has a relatively low P/E ratio, while Suncorp differs markedly in this respect since it has a P/E ratio of 20.2.
Of course that may put off a lot of investors, but Suncorp seems to be very worthy of its premium status. That's because it is expected to increase its bottom line by 80% this year, and by a further 5% next year. That puts it on a PEG ratio of just 0.5, which equates to growth at a reasonable price to go alongside a stunning yield.
Australia and New Zealand Banking Group
Although shorter term growth potential is rather muted at Australia and New Zealand Banking Group (ASX: ANZ), with earnings set to grow at an annualised rate of just 2.5% over the next two years, the longer term could be a different story.
That's because ANZ is aiming to grow its business in regions such as Asia, the Americas and Europe, with the bank targeting 30% of total revenue from those areas by 2017. It is believed this will allow ANZ's top and bottom lines to expand at a rapid rate and is a key part of the bank's future strategy.
With shares in ANZ currently yielding a fully franked 5.3%, they offer superb income potential as well as bright growth prospects. Despite rising by 50% over the last five years, they could prove to be a potent income play.
