Insurance Australia Group Ltd
Having increased dividends per share at an annualised rate of 4.4% over the last 10 years, Insurance Australia Group Ltd (ASX: IAG) has become an appealing income stock. In fact, it is one of the highest yielding stocks in the ASX, with it forecast to yield a whopping 6% over the next year. That's vastly higher than the current interest rate and also more enticing than the ASX's yield of 4.2%.
However, IAG isn't just a stock with a great yield. It also offers investors the opportunity to receive a generous real terms increase in dividends over the next couple of years. That's because IAG is expected to increase dividends by 3.3% per annum, which is almost twice the current rate of inflation of 1.7%. As such, it could prove to be a superb income stock over the medium term.
Woodside Petroleum Limited
Although Woodside Petroleum Limited (ASX: WPL) may not be viewed as the most stable of income stocks, it continues to offer an enticing mix of income and growth potential.
Certainly, the energy sector is experiencing a challenging period, with lower oil and gas prices hurting the bottom lines of the vast majority of industry players. However, as Woodside is showing with its acquisitions, it has a strong balance sheet which means it offers greater consistency than you may expect.
And, with it being forecast to yield 5% in the next year, it also has excellent income credentials.
AMP Limited
Having increased dividends per share by 13% in the last year, AMP Limited (ASX: AMP) now yields a very attractive 4.4%. That's despite the company's share price surging by an incredible 35% in the last year, as investor sentiment has improved considerably.
Looking ahead, AMP seems to be a very worthwhile investment at the present time. It has a beta of 1.6 which means that its shares should rise by 1.6% for every 1% change in the ASX's price level. And, with further interest rate cuts around the corner, high beta stock such as AMP could see their share prices rise at a rapid rate.
