If today's better-than-expected employment figures are anything to go by, 2015 could be the perfect time to consider investing in retail stocks.
Although it is far too early to suggest the economy is recovering from its downturn, retailers will be leveraged to any meaningful recovery.
Shares in prominent Australian retailers also currently offer fantastic fully franked dividend yields. Just consider the below.
Super Retail Group Limited (ASX: SUL) is the owner of Ray's Outdoors, BCF Boating Fishing and Camping, Rebel Sports and more. It's been hit hard by slowing resources sector activity, with its shares falling around 37% in the last year. However analysts are continuing to forecast a dividend equivalent to 5.1% fully franked (7.3% grossed-up).
RCG Corporation Limited (ASX: RCG) is the owner of The Athlete's Foot range of stores and has distribution agreements for brands such as Merrell and Saucony. It's tipped to pay a 6.4% fully franked (9.1% grossed-up) dividend in the next year.
High-end travel and adventure retailer Kathmandu Holdings Ltd (ASX: KMD) is expected to announce a reduction in earnings and dividends per share when it reports half-year results in late March. However, based on analysts' forecasts, a 5.5% fully franked (7.8% grossed-up) dividend can be expected throughout 2015.
Retail Food Group Limited (ASX: RFG) is the name behind food outlets such as Pizza Capers, Donut King and Brumby's Bakery. Through a successful acquisitive strategy it has expanded its range of brands and earnings considerably. Although it's priced significantly higher than its peers, it's expected to pay a fully franked dividend of 4.4% (6.3% grossed-up) in the next year.
Fellow food retailer Collins Foods Ltd (ASX: CKF) has also embarked on a blended organic and acquisitive growth strategy. Whilst its Sizzler chain is weighing on earnings, its KFC businesses continue to show robust growth. In the year ahead a fully franked dividend of 4.8% (6.8% grossed-up) can be expected.
Of the above five companies I think RCG Corp is probably the best buy now. However our top analyst recently identified one retail stock with a huge dividend yield, which is an even better buy today. It's so good in fact, he dubbed it 'The Motley Fool's Top Dividend Stock of 2015'. If you want to know its name and ASX code (for free), see below…
