Smash the market in 2015 with these 3 high-yield dividend stocks

Given that the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has dropped 2.5% this year, investors will no doubt be disappointed with their portfolios’ performance in 2014. However, with interest rates tipped to decline even further (possibly as low as 2%), loading up on high-yield dividend stocks now could be the best way to smash the market’s returns in the new year.

Most investors will look towards companies like Commonwealth Bank of Australia (ASX: CBA) or Westpac Banking Corp (ASX: WBC) for their dividends. Granted, they’re the more traditional dividend stocks and are usually considered to be ‘safe’ given their size and high liquidity.

The smart investors, on the other hand, will recognise how pricey these stocks have become and will instead look towards some of the market’s more attractive offerings.

3 dividend stocks I’m looking at

Rather than potentially overpaying for those stocks mentioned above, there are a number of others which could deliver far superior returns over the coming years.

One company that has tempted me is M2 Group Ltd (ASX: MTU), which is a great alternative to Telstra Corporation Ltd (ASX: TLS). Not only is it forecast to yield 3.8% in FY15 (fully franked), it possesses far greater growth potential than its larger rival and trades on a compelling P/E ratio of just 15 times earnings.

At their current prices, Woolworths Limited (ASX: WOW) and Super Retail Group Ltd (ASX: SUL) are also looking delicious right now. The two retailers have been out of the market’s favour this year, but the underlying businesses remain as strong as ever before and could be a great way to boost your returns in 2015.

Woolworths is tipped to distribute $1.45 per share in dividends in FY15, putting it on a fully franked yield of 4.9% (7% when grossed up), while Super Retail Group, the company behind brands like Rebel and Supercheap Auto, is expected to yield 5.6%, also fully franked.

One more company that is posing as an excellent buy right now has recently been highlighted by The Motley Fool’s top investment advisors as their BEST dividend stock pick for 2015. 

NEW! The Motley Fool's top dividend stock for 2015

Handpicked by our investment experts, this promising ASX stock boasts a fully franked yield of nearly 6%... putting term deposits to shame! You can get the name and code FREE in our brand-new report, "The Motley Fool's Top Dividend Stock for 2015."

Click here now for your free copy.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned. You can follow Ryan on Twitter @ASXvalueinvest.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.