Are you looking for big dividend stocks to combat falling interest rates?
I'd hope so…
Because, currently at just 2% per year, there's not much room between the official cash rate and the RBA's 1.3% inflation rate.
Currently big banks are offering around 2.6% on yearly term deposits.
So, in inflation-adjusted terms, after tax, you might actually be making less than 1% per year by holding cash!
Step in, big dividend stocks…
Indeed, whilst yields from the property market have been squeezed by rising prices, Australia's share market is offering some fantastic dividend stocks at decent prices.
If you're investing for the long term (five years or more) these next five stocks are particularly worthy of closer inspection…
- Credit Corp Group Limited (ASX: CCP). Forecast grossed-up dividend yield: 4.99%. Credit Corp is Australia's largest receivables management company which has recently expanded into consumer lending.
- Collection House Limited (ASX: CLH). Forecast grossed-up dividend yield: 5.64%. Another receivables management business, Collection House has grown profits every year since 2008.
- Telstra Corporation Ltd (ASX: TLS). Forecast grossed-up dividend yield: 6.93%. Telstra enjoys strong profit margins and pays a reliable dividend.
- G8 Education Ltd (ASX: GEM). Forecast grossed-up dividend yield: 9.21%. G8 Education is Australia's largest publicly-listed childcare centre owner and operator.
- Cash Converters International Ltd (ASX: CCV). Forecast grossed-up dividend yield: 7.79%. Australia's largest pawn broker, which derives a big chuck of its income from payday lending.
Buy, Hold or Sell?
Personally, as a shareholder in two of these companies, I'd say new investors could do a lot worse than add some exposure to each of these stocks. However, unless you're investing for the very long term (e.g. 10 years) then Telstra is best left off on your watchlist for now. At least until its share price retreats a little and we're afforded a more compelling valuation.
