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10 top dividend shares to buy in 2017

Given that Australia’s cash rate is sitting at just 1.5% with most pundits tipping it to go lower if anything over the course of 2017 it’s no surprise that a lot of Australians will be looking to earn a greater return on their savings than those offered by term deposits.

And I don’t blame them, with a one-year term deposit at Westpac Banking Corp (ASX: WBC) offering just 2.5% before tax you’re not going to be throwing the high fives with that kind of return, au contraire, you’ll need to find top dividend stocks with room to appreciate to get your wealth heading higher in 2017.

Below I have 10 of the best to consider over the course of the year. Although please note not all are currently on valuations that makes them compelling buys.

Mirvac Group (ASX: MQG) is the residential and commercial property developer with particular leverage to the strong east coast property markets and especially Sydney. When selling for $2.13 it should offer a yield around 5% over FY17 with a solid outlook for dividend growth.

Macquarie Group Ltd (ASX: MQG) is the asset manager and investment banker that continues to evolve in its never-ending quest to turn profits higher. The shares are looking a little stretched valuation wise at $88.90 but this is a well run organisation that should still offer a yield around 5% over the course of its FY17.

Rural Funds Group (ASX: RFF) is an investment trust that manages a portfolio of farmland and agricultural assets that pays a quarterly dividend with an impressive history of growth. The valuation also looks reasonable alongside a yield of 5.3%.

Vocus Communications Limited (ASX: VOC) makes the list due to recent large falls in its share price, which means it offers a yield in the region of 4.4% based on reasonable expectations for the total payout over FY17. Selling for $4.33 the stock looks good value in my opinion.

Event Hospitality and Entertainment Group Ltd (ASX: EVT) is the hotelier behind the popular Rydges and QT Brands. The group’s hotel businesses grew earnigns 25% in FY16, with total normalised earnings up 16% alongside expectations for another year of strong growth in FY17. Under $13.80 the shares represent good value on an earnings multiple around 16 with an anticipated yield around 4.2%.

Mantra Group Ltd (ASX: MTR) is a hotelier that like Event Hospitality has seen a lot of the heat come out of its share price recently. In my mind this represents a good opportunity to buy a solid business with excellent leverage to the growth in tourism Australia is likely to experience over the long term. The stock sells for $3.05 and should offer a yield around 4.5% over FY17.

Iress Ltd (ASX: IRE) is probably Australia’s best fintech business that may benefit as large banks and asset managers around the world loosen their purse strings on the back of a return to better times. The stock is expensive at $11.80 however and I would wait until its February results before considering a purchase. It should yield in the region of 3.9% over FY17.

Retail Food Group Limited (ASX: RFG) is the fast-food franchisor that is branching out internationally, while its coffee roasting and distribution business also continues to perform well. The group carries a fair amount of debt and the growth by acquisition strategy is not without risks, although at $7.05 this is reflected in the share price. The yield should be in the region of 4.3% over FY17.

Nick Scali Limited (ASX: NCK) is the home furniture retailer that continues to benefit from the growing equity many Australians are finding locked up in their homes. Shares are on the expensive side now at $6.20, but this remains a well run business with an attractive yield that should be on the dividend watch list for 2017.

Wesfarmers Limited’s (ASX: WES) Coles supermarkets continue to deliver strong same-store sales growth, while its Bunnings business is a profit growing machine. It looks best positioned in what is an increasingly competitive market and offers a fully franked yield of 4.7%.

WAM Capital Limited (ASX: WAM) is one of the higher quality fund managers available on the ASX that has a decent track record of lifting profits and dividends. It makes the list on valuation grounds and currently offers a bumper trailing yield in the region of 6.1%.

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Motley Fool contributor Tom Richardson owns shares of IRESS Limited, Macquarie Group Limited, MANTRA GRP FPO, Retail Food Group Limited, and Vocus Communications Limited.

You can find Tom on Twitter @tommyr345

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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