Interest rates are steadily increasing in the US. But in Australia interest rates have been dead flat for a couple of years now. This means the best place to generate income is by far the Aussie sharemarket.
High yields and franking credits mean it’s paradise for an income focused investor. The following high yield shares are worth putting on your watchlist…
JB Hi-Fi Limited (ASX: JBH)
Despite fears of Amazon destroying retail in Australia, JB Hi-Fi is still performing well. This year it delivered another year of profit growth, with earnings up by 9.2%. Sales are continuing to grow, this year up 21.8%, and online sales jumping by 32.1%, which is a good sign that JB Hi-Fi can compete in an online world.
It’s still early days for online retail in Australia, so we’ll have to see if competition intensifies over the next few years. JB Hi-Fi currently trades on a grossed-up dividend yield of 7.6%.
Platinum Capital Limited (ASX: PMC)
This is an international focused LIC, managed by Platinum Asset Management Limited (ASX: PTM). It’s been running since 1994 and has had solid performance over its 24-year history.
Platinum Capital’s portfolio is heavily weighted towards Asia, making up just over 50% of the portfolio. The company is bullish on the Asian region and currently sees many equities undervalued, based on fears of trade wars among other things.
As of late, Platinum has been recycling profits from its technology holdings and investing into the more out of favour energy, materials, and industrial sectors. Shares currently trade at a premium of 5%-10%. The current grossed up dividend yield is 8.1%, including franking credits.
Centuria Metropolitan REIT (ASX: CMA)
This is a leading ASX-listed metropolitan office REIT. The real estate investment trust owns 19 high-quality metropolitan assets worth around $900 million. Currently, it’s undertaking an equity raising to acquire a further 4 buildings to add to its portfolio, which are in targeted inner metropolitan locations.
Centuria is diversified across the major capital cities and the portfolio’s occupancy rate is 97.8%. Fixed rental increases across the portfolio average 3.6% per annum, which underpins earnings and should lead to growth over time. Shares currently trade on a distribution yield of 7.4%.
These companies all produce high levels of income but probably won’t shoot the lights out in terms of growth. To find out The Motley Fool’s favourite dividend picks for income and growth, check out the free report below.
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Motley Fool contributor Dave Gow owns shares of Centuria Metropolitan REIT. The Motley Fool Australia owns shares of Platinum Investment Management Limited. 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.