Although the Westpac Banking Corp (ASX: WBC) share price has taken a tumble this week, I still feel that the shares of Australia's oldest bank are overvalued at 15x trailing earnings.
Because of this I would suggest investors hold off an investment at this point in time and wait until its share price is at least below the $30 mark.
In the meantime I would look at an investment in one of these dividend shares:
Japara Healthcare Ltd (ASX: JHC)
Whilst the aged care sector does carry regulatory risks, there is no doubt that it is a sector with significant growth potential due to Australia's ageing population. Japara is my pick of the sector thanks to its strong management team and expansion plans. By 2020 management is targeting the addition of over 1,100 new greenfield places, a 29% on its current places. Another bonus for investors is its generous dividend. At present its shares provide a trailing fully franked 5.3% dividend.
Mantra Group Ltd (ASX: MTR)
Although its shares only provide a trailing fully franked 3.7% dividend, I believe industry tailwinds will allow the company to grow its dividend at a solid rate over the next few years. As inbound tourism continues to increase, I believe demand for Mantra's rooms will increase. I believe this should lead to higher occupancy and room rates, boosting its bottom line growth.
Telstra Corporation Ltd (ASX: TLS)
With the telco giant's share price down sharply this year, its shares now provide a trailing fully franked 7.2% dividend. While there are concerns over market share losses following the decision by TPG Telecom Ltd (ASX: TPM) to launch its own mobile network, I believe it is Optus and Vodafone that are likely to suffer the most disruption. With such a big yield on offer, Telstra would be my pick of the industry right now.
