According to three out of four top economists at Australia's big four banks, interest rates are going to drop to just 2% in 2015.
For conservative investors that means the interest rates on term deposits and savings accounts are likely to stay where they are, or go lower. So if you thought 3% per year was bad, it could get even worse before the year is out.
Right now, with property prices slowing and unemployment tipped to rise, investors should start populating a watchlist of their favourite Australian dividend stocks, many of which currently boast fully franked yields in excess of 5%.
Whilst they're not all a buy at today's prices, below is a list of five great ASX stocks with big dividend yields to stick on your 2015 watchlist…
- Australia and New Zealand Banking Group (ASX: ANZ) is our leading big bank in Asia. In the coming year, earnings per share are expected to improve modestly and a fully franked dividend of 6% is expected to be declared.
- Super Retail Group Limited (ASX: SUL) is the owner of BCF Boating Camping Fishing, Rebel, Supercheap Auto and more. Its shareholders have had a tough year, as its leisure businesses struggled to maintain profitability in the fallout of the mining boom. However in 2015 it's expected to pay a 4.85% fully franked dividend.
- BHP Billiton Limited (ASX: BHP) is the world's largest diversified mining company, with a focus on four key commodities: iron ore, coal, copper and petroleum. Unfortunately each commodity within BHP's 'Four Pillars' strategy has fallen flat over the past six months and this has resulted in a falling share price. However, for investors focused on the medium-term, there is a forecast for a 4.4% fully franked dividend this year.
- Telstra Corporation Ltd (ASX: TLS) has one of the most reliable dividends on the ASX. This is a product of its enviable cash flows, which also allow it to invest heavily in growth areas, such as its Asian businesses. It is expected to declare a payout of 30 cents per share in the coming year, equivalent to 4.87%.
- Woolworths Limited (ASX: WOW), one of two supermarket giants, has seen its shares heavily sold off in recent times, as growing concerns over its Masters Home Improvement business and competitive threats from international rivals take hold. Indeed in a little over eight months its share price has fallen from around $38 to just $30.30. However a lower share price increases dividend yield and in 2015 investors can expect a payout equivalent to 4.8% fully franked.
Buy, Hold, or Sell?
Although these five businesses each look to be compelling investments in 2015, investors need to look beyond the dividend yields to assess the true worth of the underlying businesses. Indeed at today's prices I'm not a buyer of any of these five stocks, although I do have them firmly on my watchlist.
