Leading into 2016, four companies I?ve got at the top of my dividend watch list are Flight Centre Travel Group Ltd (ASX: FLT), Retail Food Group Limited (ASX: RFG), Computershare Limited (ASX: CPU) and Wesfarmers Ltd (ASX: WES).
As I detailed here, Flight Centre undoubtedly deserves a spot on long-term investors? watch lists at today?s prices. Flight Centre is founder-run, has great economics and is growing its network of travel agents internationally, throughout the UK, USA and further abroad. Best of all, the company?s shares appear cheap at today?s levels and boast a dividend yield of 4%…
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Leading into 2016, four companies I’ve got at the top of my dividend watch list are Flight Centre Travel Group Ltd (ASX: FLT), Retail Food Group Limited (ASX: RFG), Computershare Limited (ASX: CPU) and Wesfarmers Ltd (ASX: WES).
As I detailed here, Flight Centre undoubtedly deserves a spot on long-term investors’ watch lists at today’s prices. Flight Centre is founder-run, has great economics and is growing its network of travel agents internationally, throughout the UK, USA and further abroad. Best of all, the company’s shares appear cheap at today’s levels and boast a dividend yield of 4% fully franked.
Retail Food Group
Retail Food Group is the owner of popular brands like Donut King, Gloria Jean’s, Crust Pizza, Brumby’s Bakery and much more. Recently, an international expansion into the global coffee market was met by souring investor sentiment, and Retail Food Group’s share price fell hard. In my opinion, this has provided a good entry point into a solid growth company. Moreover, much like Flight Centre, Retail Food Group shares pay a healthy fully franked dividend, equivalent to 5.3% fully franked.
The share price of Computershare, a leading global share registry services business, has performed quite poorly in recent years, as profit growth muted. However, Computershare is a sound, defensive, dividend-paying business with global reach and handy tail winds to boot. Indeed, Computershare benefits from rising global interest rates since it, at any one time, has billions of dollars on its balance sheet earning interest. With the US Federal Reserve hinting at four potential interest rate increases in the near future, more interest will be received and it’ll fall almost entirely to Computershare’s profit line. It is forecast to pay a partially-franked 3.28% dividend in the next 12 months.
Wesfarmers is the owner of Coles, Kmart, Target, Bunnings Warehouse, Officeworks and more. Operating as an old-school conglomerate, Wesfarmers has been in operation for over 100 years. The ongoing growth of Aldi and Costco will impact the local grocery market, including Coles. However, Australia’s second-largest supermarket chain is currently growing sales and profit at a healthy clip. And in 2016, I expect more of the same. Wesfarmers’ shares are forecast to pay a fully franked dividend equivalent to a yield of 4.95% fully franked.
Buy, Hold or Sell?
These four companies are some of the ASX’s finest. Each company has brand power, is growing steadily and pays solid dividends. At today’s prices, investors could do far worse than build a position in each company. However, if I had to choose my favourite share for new money today, it’d be out of Retail Food Group or Flight Centre.
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Motley Fool writer/analyst Owen Raszkiewicz owns shares of Computershare and Retail Food, and has a financial interest in Flight Centre.
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 owns shares of Computershare and Retail Food Group 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.