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.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Our parent company owns shares of Berkshire Hathaway. Motley Fool contributor Ryan Newman owns shares of Altium, 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 Altium and 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.
- Coronavirus (COVID-19): 6 charts every Australian needs to see – April 6, 2020 1:46pm
- Innovation through crisis – April 2, 2020 11:48am
- Coronavirus (Covid-19): Why Is Italy’s Fatality Rate So Bad? – March 26, 2020 3:39pm