Want a diversified portfolio that pays decent dividends, with franking credits as well?
One factor that is important to consider is how sustainable are a company's dividends, and we also need to make sure that the companies can grow those dividends over time.
There's not much point adding a high dividend-paying stock to your portfolio if the company can't grow its dividends at least above the level of inflation – which is generally around 2%-3%.
The following selection of stocks should be able to provide the necessary dividends, as well as growth of those dividends for many years to come.
| Company | Share Price | Market Cap ($m) | Dividend Yield |
| Tamawood Limited (ASX: TWD) | $3.46 | $79.8 | 6.9% |
| Think Childcare Ltd (ASX: TNK) | $2.11 | $88.3 | 5.4% |
| Hunter Hall International Ltd (ASX: HHL) | $3.58 | $104.5 | 8.0% |
| Contango Microcap Ltd (ASX: CTN) | $1.10 | $186.1 | 5.8% |
| Reject Shop Ltd (ASX: TRS) | $7.72 | $221.6 | 5.8% |
| Australian Finance Group Ltd (ASX: AFG) | $1.28 | $285.5 | 6.9% |
| Industria REIT (ASX: IDR) | $2.07 | $336.8 | 7.6% |
| Virtus Health Ltd (ASX: VRT) | $5.77 | $454.2 | 5.1% |
| Village Roadshow Ltd (ASX: VRL) | $4.57 | $711.0 | 5.7% |
| Retail Food Group Limited (ASX: RFG) | $6.10 | $1,017.2 | 4.5% |
| Flight Centre Travel Group Ltd (ASX: FLT) | $29.93 | $2,995.7 | 5.1% |
| ASX Ltd (ASX: ASX) | $47.32 | $9,074.9 | 4.3% |
| Sydney Airport Holdings Ltd (ASX: SYD) | $5.99 | $13,409.1 | 4.7% |
| Wesfarmers Ltd (ASX: WES) | $41.01 | $46,108.1 | 4.5% |
| Westpac Banking Corp (ASX: WBC) | $30.78 | $103,261.7 | 6.1% |
Source: Google Finance, S&P Global Markets Intelligence
The stocks above come from several different sectors and include exposure to property, healthcare, consumer staples, retail, listed investment companies (ASX and international) and banking and finance.
There's also a mix of companies of different sizes, potential for growth in their dividends as well as capital gains from rising share prices. I also selected 15 stocks – no more – to give a decent amount of diversification, as studies have shown any more stocks don't add much to the diversity.
