Woolworths Limited (ASX: WOW) has proven to be one of ASX's best dividend stocks over the past two decades.
However, despite continuously raising the bar on its payouts and growing into Australia's largest supermarket operator, analysts are now questioning the sustainability of the retail giant's dividend payout.
Following a share price fall of around 30% in the past year, Woolworths currently yields a hefty 5.3% fully franked. Accounting for the tax-effective franking credits that's a whopping grossed-up yield of 7.5%.
Better alternatives
However, Woolworths isn't the only quality retail company offering up a spectacular dividend yield, and it is certainly facing its fair share of risks. Therefore, investors might consider turning their attention to other quality retail stocks like Flight Centre Travel Group Ltd (ASX: FLT) or Retail Food Group Limited (ASX: RFG).
Flight Centre shares are not only offering a fully franked dividend yield of 4%, but they also offer growth at a discounted price. In fact, at their current price of $37.51, I think Flight Centre is a worthy addition to portfolios of all investors focused on the long-term.
Retail Food Group shares appear just as cheap as Flight Centre's, but are forecast to pay a dividend of 5.8% fully franked – that's over 8.2% grossed up! Retail Food is the name behind brands such as Donut King, Gloria Jean's, Pizza Capers, Crust Pizza, Brumby's and much more.
Buy, Hold or Sell?
While they'll looking relatively cheap at today's prices and at least deserve a spot on investors' watchlists, I think that both Flight Centre and Retail Food Group are good buys today.
