Every portfolio needs to have some solid blue-chip dividend stocks in order to mitigate risk and maximise our chances of beating the S&P/ASX200 (INDEX: ^AXJO) (ASX: XJO).
But picking and choosing a good price to pay, can be very difficult.
For investors in retirement there are a few stereotypical characteristics you'd look for from your share market investments. Strong brands, big and reliable dividends and modest growth are just some of the things you'll likely desire. Indeed, making these types of investments has proven to be the best strategy for increasing your chances of retiring wealthy.
With that in mind, here are five blue-chip stocks you should look to add to your watchlist and, when the price is right, your portfolio.
1. Telstra Corporation Ltd (ASX: TLS) has an outstanding 5.2% fully franked dividend and exciting growth prospects in Asia. With a huge pile of cash and no sign of losing its commanding lead in the domestic mobile, internet and pay-TV markets, Telstra appears to be a standout long-term investment. However, at today's price, it's probably best left on your watchlist for now.
2. Coca-Cola Amatil Ltd (ASX: CCL) is another great buy for investors demanding a good quality dividend and modest long-term growth. Thanks to a recent drop in share price and operational restructuring, CCA is forecast to pay a 4.3% dividend in the coming year and return to earnings per share growth in the near-term.
3. Insurance Australia Group Ltd (ASX: IAG) is one of the Australia's best insurers and pays a dividend which matches its reputation. Its shares appear to trade cheap (currently on a price to earnings ratio of just 12) whilst the market's average is 15 – reflecting the inherent risk of the insurance business. Despite this it boasts a 5.9% fully franked dividend, which is enviable in the current low interest rate environment.
4. Transurban Group (ASX: TCL) is the owner of a huge portfolio of Australian toll roads, with additional interests in the USA. Although it looks to be trading on demanding earnings multiples, Transurban's business has some of strongest barriers to entry for new competitors, making it likely it'll continue to reward long-term shareholders with its generous dividend, currently forecast at 4.7%.
One dividend stock which is even better
