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Attention Dividend Seekers: 8 top dividend paying shares for 2017

With interest rates expected to stay at historically low levels for the majority of 2017, there is a good chance that dividend shares will continue to be a popular choice amongst investors looking for a decent income stream.

As we have seen during the course of 2016 not all dividend shares are equal. In fact, some of the most ‘defensive’ income shares have taken a pretty big beating recently:

Source: Google Finance

Source: Google Finance

Unfortunately, there is a good chance that many of these interest rate sensitive, or ‘bond-proxy’, shares will continue to underperform in 2017 if US interest rates continue to climb higher.

Luckily, there are a number of attractive dividend-paying shares on the ASX that are less sensitive to the gyrations of the bond market and look like pretty good bets for 2017.

I have highlighted eight of my favourites below:

Retail Food Group Limited (ASX: RFG) – Retail Food Group is a Fool favourite and for good reason. The company is expected to provide a fully franked dividend yield of around 4.7% over the next 12 months and, at the same time, grow its underlying earnings at around 20%. Not bad for a company trading on a price-to-earnings (P/E) ratio of just 15.

Mantra Group Ltd (ASX: MTR) – Mantra trades on a forecast dividend yield of 4.5% and also provides investors with direct exposure to Australia’s tourism boom.

Greencross Limited (ASX: GXL) – Greencross is in the process of implementing a clever strategy of co-locating veterinary clinics inside its retail stores. This is expected to drive sales growth over the coming years and support a growing dividend which is now yielding around 3%.

InvoCare Limited (ASX: IVC) – InvoCare’s expansion into the US has hit some speed-bumps recently, but its consistent performance in Australia means the funeral operator is still a good choice for nervous investors. The shares currently offer a forecast fully franked yield of 3.3%

APN Outdoor Group Ltd (ASX: APO) – It has been a volatile year for APN Outdoor shareholders but the shares have been moving back in the right direction over the past month or so. The out-of-home advertising sector remains attractive and the shares currently offer a yield of 3.2%.

Lifehealthcare Group Ltd (ASX: LHC) – Lifehealthcare is a small-cap healthcare company that provides surgical equipment across Australia and New Zealand. The shares offers a dividend yield of 5.2% and trade on an undemanding P/E ratio of just 12.

Challenger Ltd (ASX: CGF) – The annuity provider has been a top performing share over the past couple of years and there is little to suggest this trend will end anytime soon. The ageing population is a real tailwind for Challenger and this should support a growing dividend which is currently yielding around 3.2%.

WAM Capital Limited (ASX: WAM) – The listed investment company has an excellent track record of outperforming the market and, at the same time, is far less volatile. The shares are a good choice for risk averse investors and offer an attractive trailing dividend yield of 6.1%.

If you are after even more ideas to boost your portfolio in 2017, then you might want to check-out this top dividend share!

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Motley Fool contributor Christopher Georges owns shares of APN Outdoor Group Ltd, LifeHealthcare Group Limited, MANTRA GRP FPO, and Retail Food Group Limited. The Motley Fool Australia owns shares of 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.

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