Buying shares of companies offering solid dividend yields is a great way to improve your returns during periods of low interest rates. With the country's cash rate stuck at just 2% — and with further falls possible — now could be a great time to consider topping up on some of Australia's best dividend payers.
Here are 10 you should look at today (in no particular order):
- Retail Food Group Limited (ASX: RFG) is the owner of brands like Pizza Capers, Donut King, and Gloria Jean's Coffee amongst various others. The shares are trading at a considerable discount to their 52-week high and offer a great 5.5%, fully franked dividend yield.
- Westfield Corp Ltd (ASX: WFD) owns and operates Westfield-branded shopping centres in the U.S. and the U.K., putting it in a great position to benefit from their recovering economies (and a weak Australian dollar). The stock is forecast to yield around 3.5% this financial year.
- Scentre Group Ltd (ASX: SCG), on the other hand, owns and operates Westfield-branded shopping centres locally and in New Zealand. Like Westfield Corp, Scentre Group offers a compelling dividend yield of 5.1%.
- Collection House Limited (ASX: CLH) not only offers a 4.6% fully franked dividend yield, but also reasonable growth prospects and a very compelling price. Collection House is one of Australia's leading receivable management groups, or debt collection groups to you and me.
- Telstra Corporation Ltd (ASX: TLS), Australia's leading telco, also offers compelling value today for long-term investors. At $5.57 per share, the company offers a 5.5% dividend yield, fully franked.
- Wesfarmers Ltd (ASX: WES) is the owner of businesses like Coles and Bunnings Warehouse. The shares trade for $41.67 each and are expected to yield 5% (fully franked) this financial year.
- Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is Australia's equivalent to Warren Buffett's Berkshire Hathaway. The investment conglomerate offers investors an opportunity to diversify, as well as a 3.2% fully franked dividend yield.
- JB Hi-Fi Limited (ASX: JBH) has time and again proven its ability to adapt to the changing retail landscape, as demonstrated by its more recent push into the white goods market. The shares offer a 5% fully franked dividend yield.
- Altium Limited (ASX: ALU) develops software for the design of electronic parts and could be set for significant growth over the coming years. Plus, it's trading on a forecast 5.7% dividend yield (unfranked), which is also tipped to continue growing.
- Greencross Limited (ASX: GXL) is another company offering both growth and yield. The pet retailer and provider of veterinary services continues to expand around the country and yields 3.5%, fully franked.
Which should you buy?
Of the companies mentioned above, I would be most inclined to buy (more) shares of both Retail Food Group or Collection House (I already own both), although I think Telstra appears to be a reasonable buy as well for long-term investors.
