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These 3 shares have dividend yields too good to ignore

Are you looking for investments that can give you good income?

Perhaps you aren’t satisfied with the 2% p.a. currently offered by some term deposits or the 2.82% yield currently offered by the Australian government bonds.

Perhaps the 4% yield on your unit in Melbourne isn’t quite good enough and perhaps you need something else that can beat the 6% dividend yield you are getting on your Commonwealth Bank of Australia (ASX: CBA) shares.

Well, these three shares have dividend yields that are too good to ignore.

Telstra Corporation Ltd (ASX: TLS)

With a current dividend yield of 8% according to Morningstar, Telstra shares are worth a closer look. Changes in technology such as 5G and the Internet of Things could create opportunities for Telstra but of course, there are negatives.

Telstra share have lost over 50% of their value over the last 3 years due to many factors including lost revenue relating to the NBN, as well as the anticipated increased mobile competition from TPG Telecom Ltd (ASX: TPM). There is always a risk that Telstra could stay in this slump for a while, but I think it’s a risk worth taking to include this blue chip stock as part of a diversified income portfolio.

Vicinity Centres Re Ltd (ASX: VCX)

Vicinity is still trading below its book value and offers a dividend yield of 7%. Top broker Goldman Sachs has a buy rating on Vicinity and their view is that at current prices, it offers greater value when compared to Scentre Group (ASX: SCG) and Charter Hall Retail REIT( ASX: CQR).

Spark New Zealand Ltd (ASX: SPK)

The New Zealand-based telco keeps growing its mobile market share and has a relatively strong balance sheet that can be used for future capital investment. It’s also the first provider to test 5G in New Zealand and it’s looking attractive with its 7% dividend yield.

In addition to the shares above, I like companies that have high dividend yields that are expected to continue increasing their dividend payments at a sustainable payout ratio. This has a compounding effect and can really grow your wealth over the long term. This report prepared by our team of experts identifies the ASX companies that are set to raise dividends.

Breaking news: ASX companies set to raise dividends!

It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.

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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia owns shares of and has recommended Telstra Limited and TPG Telecom Limited. The Motley Fool Australia has recommended Scentre 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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