Investing in stocks is one of the most rewarding things you can do with money, it's even more enjoyable when those stocks pay you dividends.
Australia is one of the best places in the world to receive dividends because of the lack of double taxation at the corporate and then individual level. This is because of franking credits, which refunds the tax to the shareholder that the company has paid.
Not every stock on the ASX has franking credits with their dividends, but for the ones that do it provides a significant boost to the dividend yield.
Here are five stocks with grossed up dividend yields over 5.5%:
Medibank Private Ltd (ASX: MPL) is Australia's largest private health insurer. The share price has performed well since listing, having grown by 40% since the offer price of $2 in November 2014.
Medibank could grow further as healthcare costs continue to spiral upwards and more people have to get private health insurance.
Medibank is trading at 18x FY17's estimated earnings with a grossed up dividend yield of 5.61%.
Rural Funds Group (ASX: RFF) is Australia's only listed farmland real estate investment trust. It has a number of different farm types including almonds, vineyards, cotton and cattle.
Rural Funds Group could continue to grow nicely as it acquires more farms and water rights. It's currently trading with a forward dividend yield for FY17 of 5.54%.
Retail Food Group Limited (ASX: RFG) is one of Australia's largest food outlet franchisors whose network includes Gloria Jean's, Donut King, Brumby's Bakery and The Coffee Guy. It's also one of the biggest coffee roasters in Australia.
It has plans to add around 1,000 outlets to its existing network of 2,500, with a lot of this growth expected to come from overseas countries like China.
Retail Food Group is trading at 16.7x FY17's estimated earnings with a grossed up dividend yield of 5.72%.
WAM Capital Limited (ASX: WAM) is one of Australia's best performing listed invested companies (LICs) having grown its portfolio by 21.6% in FY16 and has beaten its benchmark over long term time periods.
WAM Capital mostly invests in smaller growth stocks whilst keeping a good amount of cash to protect from share market declines.
It's trading at 11.3x FY16's earnings with a grossed up dividend yield of 8.66%.
WAM Research Limited (ASX: WAX) is another LIC managed by Geoff Wilson and his team. It's managed in a similarly successful way to WAM Capital, however it is more focused on research and less on what the market is doing. It has also outperformed the market, having grown the portfolio during FY16 by 25.5%.
WAM Research is trading at 10x FY16's earnings with a grossed up dividend yield of 7.91%.
Foolish takeaway
All of these stocks are offering juicy dividend yields, but out of the above at the current prices I think WAM Research, WAM Capital and Retail Food Group would make good investments for a Foolish portfolio.
