Shares are a riskier investment than term deposits and government bonds. Many Australians would say they're even riskier than property investment. However, on average and over the long-term, the historical performance of shares is nigh unparalleled.
In fact, since 1990, Australian shares have returned an average of 9.6% per year, according to Vanguard. That's more than cash (5.8% p.a.), property (8.5% p.a.) and bonds (8.3% p.a.). Moreover, local shares performed better than international shares, which returned 6.9% per year on average.
One of the reasons ASX-listed shares performed so well can be put down to dividends. Australian companies — and shareholders — have the ability to pay franking credits, a tax-effective benefit that ultimately boosts the returns of dividends.
3 blue chip dividend stocks for your portfolio
Here are three great dividend-paying Australian businesses listed on the ASX to consider owning today.
- Telstra Corporation Ltd (ASX: TLS) – Telstra is the leading telecommunications carrier in local markets. Telstra has a dominant position in mobiles, fixed internet, network applications and machine-to-machine communication. An expansion into Asia and Australians' increasing use of smart devices bode well for greater returns from Telstra shares over the long-term. Telstra shares are forecast to pay a fully franked dividend equivalent to 5.8% fully franked.
- Flight Centre Travel Group Ltd (ASX: FLT) – Shares of Flight Centre plummeted earlier this year as investors grew concerned about the company's apparent 0.3% loss of Australia's leisure travel market. Although shares in the company have bounced back strongly, it appears very cheap — even at today's prices — and is forecast to yield 4.1% fully franked.
- Coca-Cola Amatil Ltd (ASX: CCL) – Coca-Cola Amatil is Australia's and five neighbouring countries' bottler and distributor of Coca-Cola products. Its shares have struggled in recent years. However, with Coca-Cola Amati's share price down from over $15 in 2013 and currently trading at $9.07 there may be value in the company's shares. It's forecast to pay a 4.6% partially franked dividend.
