Blue-chip stocks that pay hefty dividend yields are always attractive to long-term investors. Building good, steady income each year is one of the best ways to secure a wealthy future and comfortable retirement. What's even better is when those same stocks, usually slow growers because of their size, are able to increase earnings like smaller, more nimble companies.
Here are three stocks offering high yields that blue-chip investors are accustomed to, along with earnings growth that can drive future dividend payouts to rise.
Macquarie Group Ltd (ASX: MQG) is an investment bank nicknamed "The Millionaire Factory". Along with generating healthy fees for corporate activities such as mergers & acquisitions, IPOs and capital raisings, it is one of Australia's biggest fund managers. It offers a 4.9% partially franked dividend yield.
It has a good track record for raising dividend payouts – over 7% on average annually over the past 10 years. On top of that, recent full year earnings per share are up over 50% with the recovery of international financial markets and increased corporate activities.
Insurance Australia Group Limited (ASX: IAG) is the market leader in general insurance and has such brands as NRMA Insurance, CGU and SGIO. The insurance industry is recovering after a tough 2011 / 2012, which we could see in the insurer's sudden and large rise in earnings in FY 2013. The stock's yield is a very generous 5.9% fully franked, which beats most bank term deposit interest rates.
Long-term investors could do well with dividend stocks paying good income over many years because insurers know the power of compounding through investing, too.
Leighton Holdings Limited (ASX: LEI), the well known engineering and construction company has seen mining related business weaken from the recent mining pullback. However, it is compensating for that by doing more work in the LNG export industry, which is currently expanding greatly. Also the Federal infrastructure spending plan will be a big plus for the company as more roads, rail transport and other social infrastructure projects will be started over the next six years.
It has a 5.2% partially franked yield. Earnings are expected by analyst consensus to possibly rise about 9% annually over the next two years, which could see dividends rise as much as 5% annually as well.
