As investors, we're always looking for the next big thing. This could be in the form of a new piece of technology that is set to revolutionise a particular industry or product line, or an industry which offers significant growth potential over the long term. It could even be a sector or company that offers great value for money, or which stands to benefit from a weak Aussie dollar or the growth potential of the emerging world.
However, sometimes it is the most obvious companies and sectors which remain great places to invest capital. And, while investing for income is seen as a rather dull and uninteresting focus to have by many investors, buying high-yield stocks could make a real difference to your retirement plans.
With that in mind, here are three stocks that could make a hugely positive impact on your bottom line over the long run.
Telstra Corporation Ltd
With a dividend yield of 4.7% (fully franked), Telstra Corporation Ltd (ASX: TLS) offers a better level of income than the ASX, which has a yield of 4.4%. And, it is set to improve over the next two years, with Telstra forecast to increase dividends at an annualised rate of 3.7% during the period.
Certainly, Telstra has a rather disappointing track record of increasing shareholder payouts, with dividends per share having risen by just 1% per annum during the last five years. However, with a new growth strategy that focuses on expanding its reach across Asia, as well as diversifying into other areas such as health care, Telstra's dividend growth prospects look bright, while a beta of just 0.5 indicates that it continues to be a top defensive play.
Australia and New Zealand Banking Group
While many of the Aussie banks are trading on relatively high price multiples, Australia and New Zealand Banking Group (ASX: ANZ) is not one of them. In fact it has a price to earnings (P/E) ratio of 13.2, which is significantly less than the ASX's P/E ratio of 16.9 and ANZ also offers a superior yield, with it currently having a fully franked yield of 5.1%.
Furthermore, ANZ's dividends are well covered, with the bank having a payout ratio of 68% last year. And, with dividends per share set to rise by 5.1% per annum over the next two years, it means that ANZ is likely to offer a real-terms increase in income for its shareholders even if falling interest rates cause inflation to soar.
Scentre Group Ltd
The recent bond issue by Scentre Group Ltd (ASX: SCG) provides evidence that the shopping centre operator remains a relatively low risk investment, with it being able to command an interest rate of just 2.4%-3.2% on its $1.3bn bond issue. Of course it may be more profitable to buy a slice of Scentre rather than lend money to it, since it currently yields 5.4% and, with dividends set to rise by 3.4% per annum during the next two years, it could be yielding as much as 5.7% in 2016.
Furthermore, with a beta of 1.45, Scentre looks set to benefit from any upturn in the ASX. While uncertain, the index's future could be bright if more interest rate cuts boost investor sentiment and push the ASX (and Scentre) to higher highs.
