Want dividends? Put these blue chips on your watchlist

Wesfarmers Ltd (ASX: WES) shares, National Australia Bank Ltd. (ASX: NAB) shares and Platinum Asset Management Limited (ASX: PTM) shares have big dividends.

Why consider blue chip shares?

Shares have outperformed every other asset class, on average, since 1970. But they are considered too risky for some investors.

However, if you buy shares in quality dividend-paying companies and hold for the long-term (five years or more), many of the sharemarket’s risks go out the window.

Blue chip shares are the companies with names and products people know and trust. For these reasons and others, they are considered ‘lower risk’.


Wesfarmers shares pay a reliable 4.9% dividend yield. Its dividend is fully franked, too, so it can be tax effective for some investors. Wesfarmers owns and operates Coles, Bunnings Warehouse, Kmart, Target and more.

The company has enjoyed strong profit growth since it acquired Coles in the late 2000’s, together with the ongoing rollout of Bunnings. However, the company’s share price appears to have caught up with its potential growth, in my opinion. For that reason, it’s a hold in my book.


National Australia Bank shares have also performed exceptionally well in recent times and it too offers a big fully franked dividend yield – currently forecast at 5.9%.

NAB’s bread and butter is Australian and Kiwi business banking. It also controls a large chunk of household debt, which is currently at a record high for the average Australian.

It pains me to say it (look at that dividend!) but I’ll be avoiding NAB shares at these prices given the downside risks. But, it is firmly on my watchlist.

Platinum Asset Management

Platinum Asset Management is a funds management business run by the famed Australian investor, Kerr Neilson — Australia’s 11th richest person according to Forbes. Platinum has had a rough trot lately, with its investing performance somewhat moderating in the wake of a big exodus of key investment personnel. However, the company is still a big fund manager (by Australian standards) and is expected to pay a fully franked dividend over 6%.

Of these three companies, Platinum is closest to a buy in my book.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes and encourages your feedback. You can follow him on Twitter @OwenRask.

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.

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