Planning for the future is the name of the game in investing. Investors may flock to hot stocks with high-flying share prices, but stocks aren't lottery tickets. If you're really focused on providing for your later years and retirement, then you have to think like a business owner. If you were going to buy a business, you'd want a financially strong company with decent growth potential at a decent price.
Choosing dividend stocks is no different. There may be some ups and downs along the way, as in any business, but these four stocks below have durable qualities that could reward shareholders for many years to come.
Energy sector leader Woodside Petroleum Limited (ASX: WPL) suffered a downturn along with other oil and gas stocks due to the dramatic fall in world oil prices. Yet that has raised its yield to 6.5% fully franked. There is some concern dividends may be lowered when full-year results come out. This week the company announced 300 jobs will be cut, similar to the 320 jobs lost last year. The high yield is attractive, but there may be lower share price opportunities to come as well.
Automotive Holdings Group Ltd (ASX: AHE) offers a 5.2% yield fully franked and is trading at 14 times forward earnings. Further RBA interest rate cuts could bolster auto sales and vehicle financing. The auto retail leader is also the largest refrigerated transport and warehousing company in Australia, which supports business growth and diversifies income streams for the future.
From the financial services sector, IOOF Holdings Limited (ASX: IFL) has given shareholders a total annualised return of 14.9% over the last five years, of which dividends rose about 8% yearly on average. The portfolio administrator for superannuation funds and investment trusts pays a 4.9% fully franked yield and is forecast to grow dividends in the high single digits. The long-term growth aspect of superannuation-related business would suit a dividend income portfolio.
Lastly, the currently expanding childcare centre owner and operator G8 Education Ltd (ASX: GEM) could be a good growth play. The company has been acquiring childcare and learning centres at a rapid pace. Soon it may become the largest private operator, but in a highly fragmented industry, there is still room for the franchise to grow. The stock pays a 6.00% yield fully franked.
