3 blue chips with big dividend yields

The interest rate you can get from the banks these days is abysmal, it makes it very hard to save or live off cash.

Some investors may want to invest in ‘riskier’ assets like shares, but only want to choose the bluest of blue chips.

Here are three ideas for blue chips with big dividends:

National Australia Bank Ltd (ASX: NAB)

National Australia Bank is one of the big four banks, but I think it’s the most forward-looking bank out of the four. It is regularly the first bank to adopt to new business technology such as its agreements with Xero Limited (ASX: XRO) and REA Group Limited (ASX: REA). Indeed, today it was revealed that NAB customers will be able to make payments inside Xero’s ecosystem.

If the Australian property market does continue to go backwards NAB will be affected, but perhaps less so compared to the other big banks because more of NAB’s loans are done with businesses as opposed to individuals.

NAB is currently trading with a grossed-up dividend yield of 9.65%.

Telstra Corporation Ltd (ASX: TLS)

Telstra is Australia’s largest telecommunications business, but its share price has suffered a battering in recent times due to NBN troubles and more competition.

However, today’s price could be the new low and the share price may grow in the future as 5G and the Internet of Things becomes widespread.

Telstra may have to reduce its dividend a little further if its earnings drop over the next year or two and management keep to their promise of the payout ratio remaining at a sustainable level.

However, at the moment the grossed-up dividend yield is currently 8.6% based on an annual dividend payout of 22 cents per share.

Sydney Airport Holdings Ltd (ASX: SYD)

This is the company that runs Sydney’s main airport, which is experiencing huge growth thanks to a tourism boom and population growth.

Sydney Airport is an integral piece of infrastructure and pays out a solid, growing dividend.

At the moment it has a dividend yield of 5.05%.

Foolish takeaway

Of the three shares I would wager that Sydney Airport Holdings will deliver the biggest returns due to its strong underlying growth, even if the rising interest rates do cause a few problems. However, I’m not a huge fan of any of those businesses due to either their high valuations or low growth prospects.

Instead, I’d much rather invest my money into these top stocks for dividends and growth.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank Limited and Xero. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.