As much as I would love to invest in Australia's oldest bank, I believe the current Westpac Banking Corp (ASX: WBC) share price puts its shares in the overvalued bracket of the market.
Whilst I wouldn't necessarily be in a rush to sell Westpac shares, I wouldn't want to start an investment right now as I feel there is far more downside risk than upside potential.
So instead of investing in Westpac for its market-beating dividend, I would suggest investors look at these three shares:
ASX Ltd (ASX: ASX)
As the operator of the Australian stock exchange ASX Ltd enjoys a near-monopoly status in the provision of securities exchange services. Because of this I believe it is in a strong position to grow its bottom line at a solid rate for the foreseeable future. This should allow the company to continue growing its fully-franked dividend which currently provides a trailing 4.1% yield.
InvoCare Limited (ASX: IVC)
Whilst its trailing fully franked 3.1% dividend may not be the biggest yield on the market, with over a decade of successive dividend increases behind it, I believe this funeral operator is a great option for income investors willing to make a buy and hold investment. As the market-leader in Australia I feel InvoCare is positioned perfectly to profit from Australia's growing and ageing population.
Sigma Pharmaceutical Limited (ASX: SIP)
The company behind pharmacy chain brands such as Amcal, Chemist King, and Guardian recently reported a 13% jump in full-year underlying net profit after tax. As well as this it declared a 3 cents per share final dividend, bringing its full-year payout to 5.5 cents. At the current share price this equates to a fully franked 4.3% dividend. The good news is that I think this dividend has even more room to grow in the next few years thanks partly to the progress it is making in China.
