Rio Tinto Limited
Having reported robust production numbers in Q4, investors in Rio Tinto Limited (ASX: RIO) may be feeling more confident than they otherwise would be ahead of the company reporting its full-year results this week. Certainly, the lower iron ore price is likely to have hurt its bottom line but, with China still growing by over 7% per annum, it could prove to be a better long-term performer than is currently being priced in by the market.
And, with Rio Tinto currently yielding a very enticing 4% from a dividend that is covered an impressive 1.7 times by profit, it could be a more stable income play than it is being given credit for. As such, now may prove to be the right time to buy a slice of it – even if its short-term performance is somewhat volatile.
Telstra Corporation Ltd
Also due to report earnings numbers this week is Telstra Corporation Ltd (ASX: TLS), with the telco company mooted to be about to raise its dividend following the deal with the NBN Co.
Of course, with Telstra already yielding a very enticing (and fully franked) 4.6%, any increases to dividends could be viewed as more of a bonus than as a necessity. And, with Telstra also offering highly defensive qualities such as a beta of just 0.5, it appears to be a very sound income play.
Furthermore, when you consider that an interest rate cut could make not only its yield more attractive, but also improve its sales numbers, Telstra looks set to benefit from an economic tailwind moving forward.
Origin Energy Ltd
With a yield of 4.2%, Origin Energy Ltd's (ASX: ORG) appeal as an income play is relatively obvious. However, it is also relatively good value for money at the present time, since it trades on a price to book (P/B) ratio of just 0.98, while the ASX has a P/B ratio of 1.29. Therefore, Origin Energy could see its share price move higher during the course of the year as a result of an upward adjustment to its current rating.
In addition, Origin Energy is also expected to become an even more appealing income play over the next couple of years. That's because it is forecast to increase dividends per share at an annualised rate of 9.4% over the next two years and this means that, with inflation at 1.7%, its shareholder payouts could rise by more than 5.5 times the rate of inflation. As such, Origin Energy could become more in-demand this year and see its share price move northwards.
