With the RBA having cut interest rates to 2.25% recently, dividends are understandably becoming a more important consideration for Aussie investors. After all, a lack of income from cash balances means that income from other assets will need to pick up the slack.
The good news is that there are a number of great value stocks in the ASX that offer top notch yields and bright future prospects. Here are three prime examples that could make a real difference to your income in 2015 and beyond.
QBE Insurance Group Ltd
While QBE Insurance Group Ltd (ASX: QBE) yields just 3.3% at the present time, it is forecast to increase dividends per share at a brisk pace. For example, they are expected to rise by 17.5% next year, which means that QBE could yield as much as 3.9% in 2016, as the company's improved performance under its new strategy begins to have a positive impact on its bottom line.
In fact, QBE is still in the relatively early stages of a transformation programme that is seeing the company sell-off non-core assets (such as its North American underwriting business) as it seeks to focus on developing the most profitable parts of its business. As such, its price to earnings growth (PEG) ratio of 0.8 seems appealing.
Transurban Group
A quick glance at Transurban Group's (ASX: TCL) yield does not paint the full picture of its potential as an income stock. That's because, while its 4.1% yield is attractive, Transurban is expected to increase dividends per share at an annualised rate of 11.6% over the next two years. This could mean that the company's shares yield as much as 4.8% next year.
In addition, Transurban trades on a PEG ratio of just 1.32, which compares favourably to the 2.39 of the wider market. In fact, this doesn't seem to reflect the potential that the company has with regard to the integration of its $7bn Brisbane acquisition, which is set to deliver upbeat earnings growth for the business over the long term.
Woolworths Limited
A key attribute for many income-seeking investors is stability and, in this respect, Woolworths Limited (ASX: WOW) has a lot to offer. For example, it has a beta of just 0.66 and this means that its shares should move by 0.66% for every 1% change in the value of the ASX.
In addition, Woolworths has an excellent track record of dividend per share growth, with them having risen at an annualised rate of 5.7% during the last five years, so that the stock now yields a fully franked 4.7%. This bodes well for future dividend growth, while a price to earnings (P/E) ratio of 14.6 indicates good value for the supermarkets business following its recent share price falls.
