It's still only May, but soon the new financial year will be here, so it may be a good time to make some investing goals to get you on the right foot for financial success. Stock picking is part science, part art, so there are no one-step strategies that work all the time.
However, you can tip the scales in your favour with good dividend-paying stocks. Along with an attractive yield, you want to see that the dividend is growing and the company can afford to keep paying it.
Sticking with large-cap stocks can give you more certainty that their dividends will be stable. Here are three companies that have raised their dividends and have good potential to keep on increasing them as their own earnings rise.
1) Macquarie Group Ltd (ASX: MQG)
The investment bank is paying a 4.7% dividend yield. In FY2014, it raised its full year dividend 30%. The improving economy and rising financial markets are growing its profits as it continues to build up its residential mortgage loan business. The business environment is generating more IPOs, mergers and takeovers, so Macquarie Group stands to benefit from this increased corporate activity, possibly having more dividend growth as earnings rise.
2) Flight Centre Travel Group Ltd (ASX: FLT)
The flight reservation and travel agency offers a 2.9% dividend yield. After having a strong first half with underlying net profit up 14.1 per cent, its interim dividend was raised 19.6% to 55 cents per share. Since 2010, full year dividends have almost doubled, so shareholders have been rewarded for their support and patience. The company is expanding more internationally, which could drive earnings and the dividends that follow.
3) BHP Billiton Limited (ASX: BHP)
The largest company on the ASX and the world's biggest miner pays a 3.4% dividend yield. The rise in iron ore and petroleum production helped raise its annual dividend by 13.8 per cent in 2013. The mining industry has had its ups and downs, but BHP increased yearly dividends by a compound average 14.2 per cent over the past ten years. That kind of long-term dividend growth is good for shareholder returns.
It will be supplying the Chinese market with materials as it urbanises more over the next few decades. In addition, it is expanding its petroleum production to meet growing energy demands in Asia and Europe.
