If you're like me and consistently searching for well-known stocks with top dividends, chances are you've looked at the usual suspects on the ASX including the banks and supermarket giants. Like me, you've hopefully come to the conclusion they're not cheap and far from being a bargain.
Here are five income stocks with strong brands, which I've identified as being good value at current prices.
1. Coca-Cola Amatil Ltd (ASX: CCL) is a well-known company not only in Australia but throughout Asia. It's currently trading at a discount after a setback in its share price thanks to missed earnings guidance and write-downs on its troubled SPC Ardmona business. Currently its forecast FY14 dividend yield is 5.8%.
2. Ardent Leisure Group (ASX: AAD) is the owner of brands such as Dreamworld, WhiteWater World, AMF and Kingpin bowling, Goodlife health clubs and many more. In the U.S. its Main Event family entertainment centres are popping up all over the country and rapidly growing their contribution to the company's overall earnings. It yields 5% with no franking.
3. Village Roadshow Limited (ASX: VRL) is another theme park operator and entertainment business with upside potential at current prices. As a globally recognised brand which boasts diversified revenue streams, it's little wonder Village shares have risen 44.5% in the past 12 months. Its forecast FY14 dividend yield is 4.9% fully franked.
4. M2 Group Ltd (ASX: MTU) is the owner of brands such as Dodo, Primus and Eftel. It has, in recent years, leveraged its growth from acquisitions which has resulted in a significant pile of debt. However, management recently alluded to the possibility of more acquisitions (perhaps even from its growing energy business) once debt is paid down – something which is happening quicker than expected. The synergies from the recent acquisitions are yet to be fully realised in its earnings per share and based on forecast FY14 estimates the stock looks to be trading on a price to earnings ratio as low as 10 with a 4.5% dividend yield.
5. Credit Corp Group Limited (ASX: CCP) is trading on modest earnings multiples considering both the macroeconomic and company-specific tailwinds ready to boost its share price. As Australia's biggest debt collection agency, rapidly increasing demand for credit in the current low interest rate environment will be getting its management excited over the medium-term prospects for its services. The company's lending business is also growing strongly and has long-term potential. In FY14, earnings are expected to grow modestly (around 10%) and this should be reflected with similar dividend increases giving it a forecast yield of 4.4% fully franked.
