With markets moving higher over recent years, dividend yields have trended lower for most shares. But there are still many companies trading on very solid yields – it just takes a little hunting around to find them.
Here are two options to consider:
JB Hi-Fi Limited (ASX: JBH)
This was supposed to be one of Amazon’s major victims. It seems that call might have been a little premature.
JB Hi-Fi is still performing very well, with its recent result delivering another solid year of profit growth. Earnings per-share increased by 9.2%. Total sales were up 21.8%, with online sales increasing by 32.1%, although still a small portion of overall sales.
For income investors, the dividend was increased once again – up 11.9%. Incredibly, that’s six years in a row of very strong growth in dividends. In fact, JB Hi-Fi has increased payouts by 13.2% per annum over the last 5 years.
The company continues to focus on controlling costs as sales increase, leading to larger margins. It remains to be seen how Amazon will hurt the business over the next 5 years, but so far it seems to be having little impact.
JB Hi-Fi currently trades on a grossed-up dividend yield of 7.3%.
WAM Research Limited (ASX: WAX)
This LIC is managed by Wilson Asset Management focuses on finding undervalued small-cap companies with growing earnings and free cash flow.
The WAX portfolio holds a large number of small holdings where it has identified a reason why the company is likely to be re-rated by the market. It then looks to sell once the company hits the valuation target the team has identified.
The Wilson team has been extremely successful with this method and they continually harvest capital gains to be passed onto shareholders as fully franked dividends.
In the last 10 years, the dividend has increased by 6.6% per annum and the current grossed-up dividend yield is 8.2%.
Be careful though – at the moment shares are trading at a premium to NTA of over 20%.
There’s still plenty of high-yielding opportunities out there in the market. But more important than yield, is growing income, which both of these companies have delivered over many years. Check out the free report below for another share boosting its 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.
Motley Fool contributor Dave Gow owns shares of WAM Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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.