Companies with large market capitalisations are often referred to as 'large cap' and many investors prefer to focus their attention on purchasing stocks that fall within this category. One of the advantages of purchasing large cap stocks is they are nearly always well established businesses that have an entrenched customer base, a history of making profits and a history of paying dividends. They are also likely to be covered by a number of broking analysts, which means investors can easily garner a lot of information about them.
Here are four such companies that are each leaders in their respective industries and have recently seen their share prices dip and dividend yields expand above 5%, based on forecast dividend payments over the next 12 months.
Lend Lease (ASX: LLC) has been one of Australia's global success stories. Having expanded into North and South America, Asia, Europe and the Middle East, the company now has a market capitalisation of $4.6 billion. With a mix of property development, construction and property management, Lend Lease covers the spectrum of the property market. With its share price dropping from recent highs above $11 to $8.40, the stock is currently trading on a 5% dividend yield.
ASX (ASX: ASX) needs little introduction to readers. With a market cap over $6 billion, it operates the exchange, not just for stocks but also fixed income and derivatives, and the business enjoys near monopoly status. While this monopoly power is under threat from competitors such as Chi-X, ASX still operates at high margins and is currently expected to pay a fully franked 5.2% dividend.
Adelaide Brighton (ASX: ABC) is one of Australia's leading cement and concrete products manufacturer. It is significantly leveraged to any upturn in construction levels, which would provide a boost to earnings. However, in the meantime shareholders are currently enjoying a 5.15% dividend yield from this $2 billion company.
APA Group (ASX: APA) is Australia's largest natural gas infrastructure business, which owns and operates $12 billion worth of high quality infrastructure assets. These assets include gas distribution pipelines and the Emu Downs wind farm. With a market capitalisation of nearly $5 billion, APA is a quality infrastructure business that currently is yielding 6.1%.
Foolish takeaway
Buying quality, industry-leading companies at a reasonable price that also pay solid and maintainable dividends can help investors grow their wealth. The recent sell-off in the market has made a number of these quality stocks more appealing and potentially worth further analysis.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
