The beautiful thing about a falling sharemarket is that even the high-quality companies get caught in the selloff, giving long-term investors a great opportunity to buy at beaten-down prices.
It gets even better for those investors looking for solid dividend yields. As share prices fall, the yields on offer increase so those who buy in while shares are at their cheapest tend to reap the rewards for years to come.
With interest rates set to fall even further in 2016, possibly to a low of 1.5%, now is the time to load up on some of the stock market’s best dividend-paying companies. Here are 10 that might be worth considering…
|Company||Forecast Dividend Yield||Franking||Grossed Dividend Yield||Forward Price/Earnings Ratio|
|Retail Food Group Limited (ASX: RFG)||5.6%||100%||8%||11.3x|
|JB Hi-Fi Limited (ASX: JBH)||5.3%||100%||7.5%||12.3x|
|Woolworths Limited (ASX: WOW)||5.2%||100%||7.4%||15.2x|
|Collection House Limited (ASX: CLH)||4.5%||100%||6.4%||11.5x|
|Scentre Group Ltd (ASX: SCG)||5.3%||0%||5.3%||17.4x|
|Challenger Ltd (ASX: CGF)||4.4%||100%||6.3%||12.2x|
|Greencross Limited (ASX: GXL)||3.4%||100%||4.8%||15.3x|
|Super Retail Group Ltd (ASX: SUL)||4.9%||100%||7%||14.1x|
|Flight Centre Travel Group Ltd (ASX: FLT)||4.2%||100%||6%||14.2x|
|GBST Holdings Limited (ASX: GBT)||3.6%||100%||5.1%||13.9x|
* All estimates are sourced from Morningstar data.
Of the companies mentioned above, I would have to say that Collection House is my favourite at its current price of just $2.17.
Indeed, the debt collection business has a strong track record for earnings and dividend growth — a factor which I believe is being underappreciated by the market. For the sake of full disclosure, it is also one of the biggest positions in my own personal portfolio for this reason.
I also think investors are being given a great opportunity to stock up on companies like Retail Food Group and Flight Centre, while GBST’s heavy selloff yesterday could also be an opportunity for long-term investors to get on board (the shares are now trading for $3.92, down from $5.18 on Monday).
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*Returns as of February 15th 2021
Motley Fool contributor Ryan Newman owns shares of Collection House Limited and Retail Food Group Limited. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.
The Motley Fool Australia owns shares of Collection House Limited. 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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