Were you happy with the Christmas gifts you got this year? There's always going to be one or two that are less than spectacular. For my adult children, I usually give a gift of money because they'll know exactly what they can use it for. (It also saves me from shuffling through the shopping mall on the hunt for gift ideas.)
As a lazy investor, what could be lazier than giving them blue-chip stock that gives them the money as a dividend instead of me? They'd even get it two times a year rather than just at Christmas. And with the potential share price gain over the long-term, it's the kind of gift that keeps on giving!
They're all in their early 20s now, so it's time they become shareholders and investors themselves. In twenty years, they may be taking care of me, so I'd better get them started out on reliable blue-chip stocks as soon as possible.
Energy producer Woodside Petroleum Limited (ASX: WPL) would be in my short list of stable dividend stocks. The recent drop in world oil prices has sent the stock down, but its yield is up, up, up at a huge 6.2% fully franked. Earlier this year it turned down an investment in the Leviathan LNG project, but now it is putting the US$2.5 billion it didn't commit to good use by buying a stake in the Wheatstone LNG project with Chevron Corporation. Wheatstone is projected to start production in 2016, so Woodside will see revenue sooner than previously expected. Woodside still has a sizeable war chest for further acquisitions. I would suggest adding this one to your portfolio.
Suncorp Group Ltd (ASX: SUN) is another blue-chip that has rewarded shareholders with growing dividends in recent years. Currently yielding 6.0% fully franked, investors may see more dividend growth as the company has stated it intends to return surplus capital as it proceeds with its business restructuring. It's simplifying its insurance product lines and expects to realise annual savings of around $265 million in the 2016 financial year. It's an attractive long-term stock to hold for steady income.
