When it comes to the stock market's performance in 2014, plain and simply, it was a dog of a year! After 12 months of trade, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) eked out a gain of just 1.6%. That's less than the return from keeping your money in a deposit account!
More than meets the eye
There is more to the story however. While the capital appreciation from the index was indeed lacklustre, once dividends are included (this aspect is captured by an "Accumulation" index) returns were vastly better.
Dividends save the day
So in 2014, it was dividends which provided a much-needed boost to overall returns for investors. Once again, this highlights the importance that dividend-paying stocks can have on a portfolio's overall return.
Could it be more of the same in 2015?
With the oil price crashing, the Aussie dollar heading lower, iron ore and coal miners in the doldrums and the outlook for the Australian economy sanguine, it's hard to have confidence that the stock market will put in a strong performance this year.
If that turns out to be the case, high dividend paying stocks will once again be in heavy demand by investors and they will once again make a significant contribution to overall accumulation index performance again this year. In other words, the 'chase for yield' could remain well-and-truly in vogue.
With this scenario in mind, here are five stocks which could be worthwhile considering.
- Insurance Australia Group Ltd (ASX: IAG): with a forecast dividend of 38.1 cents per share (cps) and a current share price of $6.21, this leading insurer is offering investors a fully franked yield of 6.1%.
- National Australia Bank Ltd. (ASX: NAB): with a forecast dividend of 208 cps and a current share price of $33.42, NAB is offering investors a fully franked yield of 6.2%
- Australia and New Zealand Banking Group (ASX: ANZ): with a forecast dividend of 188.4 cps and a current share price of $31.72, ANZ is offering investors a fully franked yield of 5.9%.
- Suncorp Group Ltd (ASX: SUN): with a forecast dividend of 93.6 cps and a current share price of $13.86, banking and insurance group Suncorp is offering investors a fully franked yield of 6.7%.
- JB Hi-Fi Limited (ASX: JBH): with a forecast dividend of 86.8 cps and a current share price of $15.75, leading electronics retailer JB Hi-Fi is offering investors a fully franked yield of 5.5%.
