If you're seeking big dividend yields in the sharemarket, it's hard to go past Australia's 'Big Four' banks.
| Bank stock | Dividend yield |
| Commonwealth Bank of Australia Bank (ASX: CBA) | 5.6% fully franked |
| Westpac Banking Corp (ASX: WBC) | 5.9% fully franked |
| National Australia Bank Ltd (ASX: NAB) | 6.4% fully franked |
| Australia and New Zealand Banking Group (ASX: ANZ) | 6.4% fully franked |
One look at that table, and it's easy to see why many Aussies are drawn to big bank stocks which together make up around 30% of the S&P/ASX 200 (index: ^AXJO) (ASX: XJO).
However, if the recent fall in bank stocks has taught investors anything, it's the need to be diversified. That is, not overly dependent on any one sector, such as financials.
Indeed, there are plenty of other great dividend stocks to consider holding over the coming decade.
Here're four other reputable dividend stocks you should consider holding to diversify your portfolio away from the major banks:
- Premier Investments Limited (ASX: PMV) – dividend yield: 3.3% fully franked
- Coca-Cola Amatil Ltd (ASX: CCL) – dividend yield: 4.75% partially franked
- Flight Centre Travel Group Ltd (ASX: FLT) – dividend yield: 4.11% fully franked
- Telstra Corporation Ltd (ASX: TLS) – dividend yield: 5.39% fully franked
Buy, Hold or Sell
I probably sound like a broken record, but I've been saying for a while now that bank stocks are not risk-free investments. Indeed, I suspect patient investors will get the opportunity to buy bank shares at a discount to today's prices in coming years as the economy continues to slow.
I'm not saying, however, that Premier, Coca-Cola Amatil, Flight Centre and Telstra will be immune from lower economic growth – far from it. However, investors should be mindful not to become overexposed to an already enormous banking sector, at this time.
