At the beginning of May, the Board of the Reserve Bank of Australia (RBA) decided to drop the official cash rate to the unprecedented level of just 1.75%.
Unfortunately for many self-funded retirees who hold their savings in a deposit account, their income most likely just got squeezed that little bit more.
For investors who are seeking out higher returns and income from the share market, thankfully there are still a number of attractive opportunities available that will provide yields far above the RBA’s official cash rate.
While Telstra Corporation Ltd (ASX: TLS) rightly remains a perennial favourite amongst income-seeking investors and offers a benchmark trailing fully franked dividend yield of 5.3%, there are other dividend-paying stocks which are also attractive.
Here are three shares to consider…
Argo Investments Limited (ASX: ARG) – one of the oldest and largest listed investment companies (LICs) on the ASX, Argo offers investors exposure to a blue-chip portfolio which provides diversity and a trailing fully franked dividend yield of 4.1%.
Commonwealth Bank of Australia (ASX: CBA) – banks remain incredibly profitable even if they are set to become slightly less profitable as they enter a tighter stage of the cycle. Commonwealth Bank is arguably the bank with the strongest balance sheet and with a trailing dividend yield of 5.3% it could arguably be the safest choice for bank exposure.
Tatts Group Limited (ASX: TTS) – as the operator of major lotteries across Australia, Tatts Group’s operations enjoy a regulated niche position with reliable “infrastructure-like” earnings dependability. The stock is trading on a trailing fully franked yield of 4.2%.
As an investor, if you’re hunting for juicy dividend yield opportunities it’s important to remember that yield should never be considered in isolation, but rather yield should be assessed in conjunction with the overall valuation you have for a particular stock.
Remember, it only takes a small decline in the price of a share to completely wipe out the gains from dividends that you may receive.
In other words, think about the overall return you expect to receive from a stock, not just the yield component.
These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)
Motley Fool Australia's Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.
Our team of investors think these 3 dividend stocks should be a 'must consider' for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.
Don't miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.
Returns As of 6th October 2020
Motley Fool contributor Tim McArthur has no position in any stocks mentioned. 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.
- 3 ASX stocks to buy now to get rich later – October 20, 2016 1:34pm
- Why this fund manager is worried about the sustainability of bank dividends – October 18, 2016 7:56am
- Here’s why I might buy these 2 beaten-up share bargains – October 17, 2016 4:18pm