Telstra Corporation Ltd
With shares in Telstra Corporation Ltd (ASX: TLS) being ahead of the ASX thus far in 2015, it's been a strong start to the year by the telco major. And, even though there may be a period of uncertainty following the changing of the company's CEO, with David Thodey being replaced by Andy Penn, Telstra's future still appears to be bright.
That's because Telstra remains a very appealing income stock and that's partly due to its strong dividend growth forecasts. For example, Telstra is expected to increase dividends per share at an annualised rate of 4.2% over the next two years and, when you consider that it already yields a fully franked 4.5%, this could cause its shares to become more in demand and help them to beat the ASX over a long period of time.
Cochlear Limited
Although its bottom line has been somewhat volatile over the last 10 years, Cochlear Limited (ASX: COH) has been able to grow sales at an annualised rate of 10.2% during the period. This is impressive and the company is forecast to post exceptional growth numbers moving forward.
This helps to explain its current valuation, with Cochlear trading on a high price to earnings (P/E) ratio of 38.2. However, with its bottom line forecast to grow at a similar rate in each of the next two years, such a high valuation seems to be fully justified and also means that Cochlear could be a great long term buy.
In addition, Cochlear also has an appealing track record of dividend per share growth, with shareholder payouts having risen at an annualised rate of 7.7% in the last five years. This bodes well for future shareholder returns and means that Cochlear could continue its 2015 outperformance of the ASX.
Australia and New Zealand Banking Group
Even though Australia and New Zealand Banking Group (ASX: ANZ) has only just beaten the ASX thus far this year (by around 0.5%), its future outperformance could be much more significant. That's because it has considerable scope to give investors exactly what they want at the present time: rapid dividend increases.
A key reason for this is the fact that ANZ's dividend payout ratio is relatively modest at 69% and this indicates that it can afford to raise dividends per share at a faster rate than earnings growth over the medium term. The result of this could be an increase in ANZ's 5.2% yield, or improved investor sentiment; both of which would be welcome for investors in the bank and could help it to continue to beat the wider index in the long run.
