Motley Fool Australia

4 smoking hot fully franked dividend stocks for your portfolio


Australian investors are approaching the first Tuesday of May with baited breath as they await the decision from the Board of the Reserve Bank of Australia (RBA) amid mixed views from economists on whether the RBA will hand down a further cut to the official cash rate or not.

Whether the RBA announces a cut or holds rates steady in a fortnight’s time, investors’ insatiable appetite for high dividend yields is unlikely to abate. Here are four high-yielding stock opportunities to help you navigate your portfolio through this low interest rate environment and which all have full franking credits attached.

While the earnings and dividends of insurers can be volatile, the outlook for dividends over the next few years from Insurance Australia Group Ltd (ASX: IAG) appears to be upwards, with Thomson Consensus Estimates showing expectations for a rise from 34.9 cents per share (cps) this financial year (FY) to 35.5 cps next year and then 37.2 cps in FY 2017. Based on the consensus forecast for FY 2015, IAG is currently trading on a yield of 5.8%.

Forget about the “Big 4” banks, there are even better yielding opportunities available amongst the second tier. Bendigo and Adelaide Bank Ltd (ASX: BEN) and Bank of Queensland Limited (ASX: BOQ) are a case in point with both banks offering impressive yields and with consensus forecasts that show solidly rising dividends over the next few years. Based on estimates provided by Thomson, Bendigo Bank and Bank of Queensland are trading on FY 2015 yields of 5.6% and 5.5% respectively.

Woolworths Limited (ASX: WOW) is also one for income-seeking investors to consider. The 23% share price fall in Australia’s largest supermarket retailer may not be offering a bargain investment opportunity considering the increased level of competition the company is experiencing but its yield has certainly become more enticing. According to consensus estimates this competition is likely to put a strain on both earnings and dividends with the pay-out forecast to decline in both FY 2016 and FY 2017. While this is certainly far from ideal, even based upon the 135.3 cps forecast for FY 2017 the stock still offers an appealing 4.7% yield.

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Returns As of 6th October 2020

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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