National Australia Bank Ltd.
With a yield of 5.6%, National Australia Bank Ltd. (ASX: NAB) is a highly appealing income stock. Furthermore, as its first quarter results showed when released this week, it continues to perform well, as evidenced by an increase in cash profit of 6% versus the comparable quarter from the previous year.
In addition, NAB looks set to benefit from a lower interest rate and, looking ahead, this could help it to increase dividends per share at an even faster rate than is currently being forecast by the market. Certainly, the forecast 5.6% annualised rate of growth over the next two years is more than three times the current rate of inflation, but it could move higher if lower interest rates increase demand for new loans over the medium term. As such, NAB could become an even more appealing income stock.
Telstra Corporation Ltd
For many Aussie investors, Telstra Corporation Ltd (ASX: TLS) is an obvious income choice. After all, it provides a fully franked yield of 4.5% and also offers relative stability of dividend payments, with them having increased by 5.4% in the last year for example.
Furthermore, Telstra has a relatively defensive business model that, during the course of the year, could attract nervous investors who are unsure of the prospects for the wider index. Certainly, the RBA's interest rate cut is likely to have a positive impact on the economy, but there is a time lag to factor in and more defensive stocks such as Telstra could be worth holding on to.
And, with a beta of just 0.5, Telstra's share price should move by half as much as the wider index, which could provide welcome stability during an uncertain period for Aussie investors.
Woolworths Limited
Over the last five years, Woolworths Limited (ASX: WOW) has been hugely impressive when it comes to shareholder payouts. For example, it has increased dividends per share at an annualised rate of 5.7% during the period, which has provided investors with a welcome real terms increase in their income.
And, with Woolworths currently yielding a fully franked 4.3%, it could prove to be an appealing income play during the course of the year. That's especially the case because Woolworths is forecast to increase dividends per share by almost twice the current rate of inflation over the next two years, with dividends set to grow by 3.2% per annum over the time period.
This mix of a yield plus consistent real-term increases in dividends could make a major difference to Aussie investors and be a real fillip for those investors who need to maximise their dividends while returns on cash balances reach new lows.
