Thanks to the Reserve Bank of Australia's decision to drop interest rates to just 2% earlier this month, dividend-paying stocks remain the only game in town.
After all, few Australians are likely to see value in term deposits or rental yields when dividend stocks are offering payouts well over 5%. In addition to the chance of capital gains, sometimes their dividends also come with franking credits!
5 dividend stocks to boost your income
- Scentre Group Ltd (ASX: SCG) was created through a merger of the former Westfield Retail Trust and Westfield Group's Australian and New Zealand businesses. Scentre Group securities have performed well since listing, but continue to offer a 5.3% dividend yield.
- Woolworths Limited (ASX: WOW) shares have been slammed in the past year over concerns of intense competition with rivals Coles and Aldi. However its share price fall may have been overdone. Woolies shares offer a 4.8% fully franked dividend. Grossed up for franking credits that's 6.8%!
- National Australia Bank Ltd (ASX: NAB) emerged from a trading halt last week following its decision to undertake a $5.5 billion capital raising. Despite a need for extra capital in reserve, Australia's third-largest bank by market capitalisation is currently offering a dividend yield of 5.7% fully franked (8.2% grossed-up).
- Coca-Cola Amatil Ltd (ASX: CCL) has also seen its shares sold off as intense competition takes its toll on the beverage giant's profit margins. Combined Woolies, Coles and Metcash Limited (ASX: MTS) account for 35.2% of Coca-Cola Amatil's trading revenue. It currently offers a 4.1% partially franked dividend – 5.4% grossed up.
- Ardent Leisure Group (ASX: AAD) is an entertainment and leisure business, whose brands include Goodlife Health Clubs, AMF, Kingpin Bowling and much more. With shares down 27% for the year, Ardent is being tipped to pay a 6% unfranked dividend in the next 12 months.
Buy, Hold or Sell?
Of course, when investing in shares it is vital to focus on more than the dividend yield alone. However, personally, at today's prices, I think NAB is too expensive to justify a buy rating whilst Scentre Group is a hold.
