Some investors think the most secure dividend income streams are only attainable from Australia's biggest and most widely publicised stocks such as National Australia Bank Ltd. (ASX: NAB), Telstra Corporation Ltd (ASX: TLS), Commonwealth Bank of Australia (ASX: CBA) or Woolworths Limited (ASX: WOW).
Generally, these types of investors only look inside the S&P/ASX 200 Index (ASX: XJO) (INDEX: ^AXJO) because they're perceived as being "safe" investments. If you want a 100% "safety" investment, don't buy stocks.
Bigger doesn't always mean better.
The share price performances of both Coca-Cola Amatil Ltd (ASX: CCL) and Newcrest Mining Limited (ASX: NCM) – once considered some of our country's most reliable companies – have proven that no stock is immune from the market's wild gyrations. Their share prices have underperformed the index by a whopping 60% and 85%, respectively, over the past 24 months.
In investing there's no rewards for being unique, but it's important not to be one of the herd either. That doesn't mean you have to be a contrarian but picking up shares on the cheap is a sure way to investing success. That's why I'm tempted to buy more RCG Corporation (ASX: RCG) shares than I already own!
It's understandable if you haven't heard of RCG. But as the distributor and owner of a select number of footwear labels, I can almost guarantee you know some of their products. Through wholesale channels and ownership of The Athlete's Foot, it retails exclusive names such as Merrell, Saucony, CAT (Catepillar), Cushe and much, much more.
With EBITDA growth expected to come in between 10% and 12% this year, analysts are expecting a dividend of 4.3 cents per share fully franked. That puts it on a grossed up dividend yield of 10.5%!
