Despite the RBA failing to cut official interest rates in May, many financial commentators are still suggesting interest rates could be headed lower.
They're already just 2%!
So, once again, the sharemarket is looking like a good place to park your excess capital.
After all, the imputation system is a boon for sharemarket investors because eligible shareholders are regularly offered franking credits with their dividends, which boosts the income-generating ability of your investments.
For those with a Self-Managed Superannuation Fund (SMSF) or nearing retirement, fully franked dividends are a big selling point for the local sharemarket.
Here are five stocks with big dividends to place on your watchlist today.
- Rio Tinto Limited (ASX: RIO) is Australia's largest iron ore producer. In addition to a share buyback analysts are forecasting a fully franked dividend equivalent to a yield of 5.2% fully franked.
- Telstra Corporation Ltd (ASX: TLS) is one of the ASX's best dividend stocks and Australia's leading telecommunications company. As well as investing in Asia and new technologies locally the $75 billion company is expected to pay a fully franked dividend of 4.91% over the next 12 months.
- Sky Network Television Ltd (ASX: SKT) is New Zealand's dominant pay-tv operator with a household penetration rate of around 48%. Whilst the arrival of Netflix streaming services could be spooking some investors, at today's prices the valuation of Sky's shares does not appear demanding. Moreover, it is currently being tipped to pay a dividend equivalent to 5.6% unfranked.
- Coca-Cola Amatil Ltd (ASX: CCL) is Australia's distributor of Coca-Cola and Beam-branded products. Whilst competitive risks persist, the worst of recent share price sell-offs appears to be behind it, and management are targeting a return to profit growth in the near future. Coca-Cola Amatil shares are being tipped to pay a dividend of 4.5% partially franked in the next 12 months.
- APA Group (ASX: APA) is Australia's largest owner of liquefied natural gas pipelines and infrastructure assets. In addition to its huge amount of current and recurring take-or-pay contracts with gas producers and retailers, it potentially stands at the beginning of Australia's next gold rush: rising LNG exports. Its shares currently trade on a forecast 4.3% dividend yield.
Should you buy, hold or sell these five stocks?
When picking dividend stocks, it's imperative to focus on more than dividend yield alone, and thoroughly research the underlying business.
Indeed, despite its pledge for increased returns to shareholders, personally I wouldn't buy Rio Tinto shares at today's prices. In addition, I think both APA and Telstra appear worthy of a hold rating.
