Motley Fool Australia

3 dividend stocks with yields over 7.5%

Aged Care Worker

Shares paying fully franked dividends are my favourite way of growing my investment income and wealth.

Large dividend yields and capital growth combined make shares a no-brainer for me over an investment property or other options like bonds or gold.

The great thing about dividends is that they are much less volatile than share prices. They are returns the investor gets to keep, without having to sell shares. The tax benefits of franking credits are great, particularly for retirees and people with low taxable income.

Here are three shares with huge dividend yields that offer capital growth too:

Japara Healthcare Ltd (ASX: JHC)

Japara Healthcare is one of the largest aged care providers in Australia. It’s predicted that there will be large growth in the number of people who will need an aged care home in the future.

There has been some uncertainty about funding from the government but over the long-term the aged care providers, such as Japara, should be able to find the right balance.

Japara is currently trading at 18x FY16’s earnings with a grossed-up dividend yield of 7.8%.

Clime Capital Limited (ASX: CAM)

Clime Capital is a listed investment company (LIC) run by John Abernethy. Its investment strategy is quite rare, it invests in Australian large caps, medium caps, small caps and overseas-listed shares.

Some of its biggest holdings include Ramsay Health Care Limited (ASX: RHC), Crown Resorts Ltd (ASX: CWN), Collins Foods Ltd (ASX: CKF) and APN Outdoor Group Ltd (ASX: APO). I am bullish on all of these companies, so it’s good to see a portfolio that doesn’t resemble the index at all.

Clime Capital is currently trading with a grossed-up dividend yield of 8.15%.

WAM Research Limited (ASX: WAX)

WAM Research is my favourite LIC out of all of the Wilson LICs. Geoff Wilson and his investment team have done a great job of outperforming the market over the long-term and I doubt that’s going to change any time soon if they stick to the winning formula.

It pays out an increasing dividend each year from the profit it makes and the dividends it receives.

WAM Research is currently trading with a grossed-up dividend yield of 9.03%.

Foolish takeaway

I think all three are good options for investors looking to boost their investment income. WAM Research is always a good option for retirees, but the other two should be good long-term choices as well.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison owns shares of JAPARA DEF SET, Ramsay Health Care Limited, and WAM Research Limited. The Motley Fool Australia owns shares of Crown Resorts 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.

Related Articles…

Latest posts by Tristan Harrison (see all)