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3 dividend shares I’d buy before Woolworths Limited

Australia’s love affair with blue-chip retailer Woolworths Limited (ASX: WOW) looks to have well-and-truly come to an end with the share price taking a battering over the past year, the stock is down 24%.

While on an historic basis the share price fall has made the dividend yield on offer to shareholders of Woolworths somewhat salivating based on last year’s pay out of 139 cents per share (cps), in reality analysts expect the dividend to be cut to a forecast 113 cps, so the future dividend yield is likely to be much less juicy.

Given the uncertainties facing Woolworths there would appear to be safer stocks for investors seeking a steady income, here are three to consider…

Telstra Corporation Ltd (ASX: TLS) is forecast to raise its dividend over each of the next three financial years which should hopefully mean there are no nasty surprises in store for shareholders.

With the stock trading at $5.41 and a total dividend of 31.5 cps forecast for the current financial year, a fully franked dividend yield of 5.8% is potentially available.

Australia and New Zealand Banking Group (ASX: ANZ) has experienced a price decline of 13% over the past year which is significantly more than the 1% drop in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). Despite the share price going down, ANZ Bank’s dividend is expected to increase according to analyst consensus forecast data provided by Morningstar.

With the stock having bounced off of 52-week lows to be trading at $27.74 and with a total dividend of 183.1 cps forecast for the current financial year, the implied fully franked yield is 6.6%.

IOOF Holdings Limited (ASX: IFL) hasn’t yet recovered from the abrupt sell-off in its shares earlier in the year, however, the stock is still registering a gain of around 5.5% over the past 12 months. With the dividend forecast to rise over the next few years this leading wealth manager looks like an appealing stock for an income portfolio.

With the share price at $9.64 and a total dividend of 55.8 cps forecast for the current financial year, the stock is trading on a fully franked dividend yield of 5.8%.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. 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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