Telstra Corporation Ltd (ASX: TLS) used to be a must buy share for everyone looking to build a dividend focused portfolio but profit downgrades, changes in the strategic direction of the company and a share price that has declined 58% since 2015 made it an undesirable choice.
As an alternative these three companies might be suitable choices to fill the Telstra shaped hole in your income portfolio:
Westpac Banking Corp (ASX: WBC)
Westpac like other banks Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) will benefit from rising interest rates as well as a growing population given its significant retail banking focus.
While concerns over the housing market persist, the reduction in lending to interest only borrowers and a slowdown in house price growth have contained the situation thus far.
Westpac trades at a fully franked dividend yield of 6.4% and has a payout ratio of 81%.
IOOF Holdings Limited (ASX: IFL)
IOOF benefits for the mandatory 9.5% superannuation guarantee contribution in Australia and there are tailwinds down the track as this rate increases progressively to 12%.
Further tailwinds are coming with Australia's population ageing and if IOOF completes the acquisition of the wealth management division of Australia and New Zealand Banking Group (ASX: ANZ), it will be well placed to take advantage of these.
IOOF trades at a dividend yield of 5.7%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Sol Patts has a diverse holding in a number of top quality businesses including TPG Telecom Ltd (ASX: TPM) and Australian Pharmaceutical Industries Ltd (ASX: API).
With a long history of consistently paying dividends, this company is certainly worth considering for your income portfolio.
Sol Patts trades at a dividend yield of 2.7%
If you are on the hunt for top dividend paying companies, I think you should also read this FREE report about these companies that are set to raise their dividends.
