Receiving dividends is one of the most passive and laid back ways for investors to receive an investment return. If you own an investment property you have to manage it yourself (which takes a lot of time) or pay someone to do it for you, which eats into your returns.
Most listed Australian companies pay a generous dividend, thanks to Australia’s franking credit system.
So how are you meant to choose which companies to invest in? Perhaps it would be best to look at ones that have the biggest dividend yields but are also growing the dividend, such as the below stocks:
G8 Education Ltd (ASX: GEM)
G8 Education has a grossed up dividend yield of 9.52% thanks to it paying 6c per share every quarter since January 2015.
Childcare is always in demand due to government support and the fact that both parents are generally working in these modern times.
G8 is expected to continue paying the same dividend over the next 12 months, meaning it could be counted as one of the best dividend stocks on the ASX in 2017.
Mortgage Choice Limited (ASX: MOC)
Mortgage Choice has a grossed up dividend yield of 9.9%. It’s been steadily growing its network of brokers and it’s also been growing revenue which is principally earned over the course of the loan it has brokered.
There could be a lot of consumers switching their loans because of the constantly changing interest rates from the big banks and the RBA. This would benefit Mortgage Choice substantially if it can capture some of this activity.
Bank of Queensland Limited (ASX: BOQ)
The regional bank has a grossed up dividend yield of 8.77%.
It has been advertising its point of difference that it has better and more individual service than the big four banks. This tactic seems to be working as BOQ is steadily growing its loan book.
It could become more competitive in time as the big four banks are required to hold more capital against the loans that they lend out.
WAM Capital Limited (ASX: WAM)
WAM Capital has a grossed up dividend yield of 8.6% thanks to the excellent performance of its portfolio managed by Geoff Wilson and his team.
It’s been one of the best-performing listed investment companies over the last 12 months and could continue to be by investing in fast-growing small caps, whilst also holding a significant cash balance for protection and ammunition.
Time to buy?
I think all four of these stocks will pay large and consistent dividends over the next 12 months.
However, if I had to choose two for longer term performance I’d choose WAM Capital and G8 Education. If these dividend stocks aren’t enough to satisfy your demand for dividends, you should check out our number one dividend pick for 2017.
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Motley Fool contributor Tristan Harrison owns shares of WAM Capital Limited. 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.