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3 dividend stocks with yields over 5%

Shares seem to be the only game in town offering any sort of decent income these days.

Of course, just because a share has a decent yield doesn’t mean it’s automatically a buy. To be a good dividend share the underlying business needs to have a promising future too.

Below are three ideas of shares offering good income:

Folkestone Education Trust (ASX: FET)

Folkestone describes itself as the largest ASX-listed real estate investment trust (REIT) that invests in early learning properties.

Childcare is a rising industry due to the growing population and number of births in Australia.

Folkestone is steadily increasing its property portfolio, as well as growing its profit and distribution.

It’s currently trading with a distribution yield of 5.23%.

Australian United Investment Company Ltd (ASX: AUI)

Australian United is one of the oldest listed investment companies (LICs) on the market having operated for over 60 years.

The LIC invests in all the major blue chips like Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), CSL Limited (ASX: CSL) and Transurban Group (ASX: TCL).

Australian United has increased or maintained the dividend every year going back to 1992.

It’s currently trading with a grossed-up dividend yield of 5.73%.

Paragon Care Ltd (ASX: PGC)

Paragon is a small cap healthcare business that is steadily acquiring other businesses to add scale and open up new markets.

Healthcare is an attractive industry to grow in because of the ageing population which should mean more patients. This should turn into rising demand for Paragon’s products.

Paragon has increased its dividend each year since it started paying dividends and is currently trading with a grossed-up dividend yield of 5.91%.

Foolish takeaway

All three shares look pretty good for their potential income. At the current prices I’d definitely go for Paragon because it offers the best growth potential and it has the best dividend yield.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Paragon Care Limited and Transurban Group. 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 Scott Phillips.

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