The 3 top dividend stocks for your Christmas list

Forget socks and undies, strong performing dividend stocks are the gifts that keep on giving this Christmas. And as Christmas rolls into view, now is a perfect time to pick up some great dividend bargains on the cheap.

Here are three of my favourite dividend payers to put at the top of your Christmas wish-list:

G8 Education Ltd (ASX: GEM)Dividend Yield: 4.2%, fully franked

G8 Education thrilled investors earlier this month when it announced a 20% increase to its dividend from 20 to 24cps. The company said it was a reflection of its strong performance and it is steadily becoming a ‘must have’ dividend stock as it bolts on new childcare centres and beds down its rapid growth.

Dividends are paid quarterly and G8 Education is forecasting FY14 EBIT growth of over 100%, recently advising the market it was aiming for a year end EBIT of around $104 million, up from $49.4 million in FY13.

SKYCITY Entertainment Group Limited-Ord (ASX: SKC)

Dividend Yield: 4.65%, partially franked

Shares in SKYCITY Entertainment Group Limited-Ord dropped back last week after announcing it would need to work with the New Zealand government to hammer out ways to fund cost increases to the planned Auckland Convention Centre. The gaming company is funding the project in exchange for increased gaming tables and poker machines and is also adding a new five-star hotel and retail precinct.

With a strong, defensive plan for growth over the next five years and a significant monopoly advantage, SKYCITY Entertainment will continue to earn strong cashflows to fund its dividends to investors.

IOOF Holdings Limited (ASX: IFL)

Dividend Yield: 4.2%, fully franked

Wealth management company IOOF Holdings Limited had a good 2014. The company had record net-inflows of money to manage and grew earnings per share (eps) by 12.5%. That let the company increase its dividend by 13% which comes fully franked.

The FY14 performance was supported by strong share market performance, but IOOF’s outlook into FY15 is forecast to be especially strong as interest rates remain low and investors seek higher returns.

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Motley Fool contributor Regan Pearson owns shares in SKYCITY Entertainment Group Limited

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