A high yielding portfolio for retirees

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.

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Motley Fool writer/analyst Mike King owns shares in Contango Microcap, Flight Centre Travel Group, Wesfarmers and Sydney Airport. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia owns shares in Retail Food Group. 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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