Good dividend income to build up your future wealth is one goal that most investors have. However, many just stick to the "tried and true" bank stocks for that income. They don't search out other even more generous opportunities on the ASX.
At this point in the game, the big four bank stocks have already risen appreciably. They do offer good yields, the highest currently is the 5.5% yield of National Australia Bank Ltd. (ASX: NAB). Still, rather than having to settle for fully priced stocks, finding companies beating even that yield which have more upside potential is probably what you should seek.
— Fashion retailer OrotonGroup Limited (ASX: ORL) has been flying under the radar somewhat since their licencing deal with Ralph Lauren ended in the middle of last year. It is steadily replacing the Ralph Lauren revenue stream by signing licencing deals with U.S.-based The Gap and Brooks Brothers. New stores have been started or converted over to the new fashion brands. Likewise, the company is expanding its international store network in Hong Kong, Shanghai and Dubai.
It hit a low of $3.40 a share in March when it reported its half-year results, but since then is up 28% to $4.36. It offers a whopping 7.9% yield fully franked.
— Leading general insurance company Insurance Australia Group Ltd (ASX: IAG) comes in with a fat 5.9% yield fully franked. That's still after hitting a new 52-week high of $6.61 this week. The insurance industry has been improving in general over the last year. Fewer natural disasters of late have lowered claims, for more insurance profits.
In addition, the company is reorganising its business structure as it integrates the insurance underwriting business it acquired from Wesfarmers Ltd (ASX: WES) earlier this year. This should help lower its costs and streamline business. The savings can help future earnings as well as attract customers with competitive premium offerings.
The hunt for good dividend stocks can involve blue-chip stocks all the way to smaller, yet dynamic companies. It does take time to find them, but it can be well worth it when you can have both a high yield and strong earnings growth in one stock.
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