The largest businesses on the ASX seem to be struggling to find growth in Australia, so the large businesses that might provide the best total shareholder returns over the next 12 months could be the ones offering the biggest sustainable dividends.
Below are three large blue chips with big dividends that could be worth adding to your portfolio:
Telstra Corporation Ltd (ASX: TLS)
Telstra is by far the largest telecommunications business on the ASX with a market capitalisation of $62.3 billion.
It has fallen a long way since its all time high of $6.61 in February 2015, but that just makes the starting dividend yield more appealing.
Telstra has a dominant market leading position of mobile users and is continuing to grow its customer base – in FY16 it grew mobile users by 560,000. This could be important as the upcoming 5G network may make the NBN somewhat redundant in comparison.
Although Telstra hasn't grown its revenue or profit much over the last 10 years, it has managed to maintain its performance and slowly grow its dividend, which may be enough for shareholders looking for stable income.
Telstra is trading at 15.5x FY17's estimated earnings with a grossed up dividend yield of 8.48%.
Commonwealth Bank of Australia (ASX: CBA)
Australia's largest listed business has a market capitalisation of $144.5 billion. Even during the GFC the banking behemoth kept paying a decent dividend and was still earning billions in profit.
I expect it will continue being generous to shareholders thanks to its strengthened balance sheet and more cautious loan book in recent times.
It is the most diverse big four bank in earnings with its loans, financial planning, CommSec, CommInsure and Colonial First State.
It grew its dividend every year between 2009 and 2015 and maintained it during 2016. It's currently trading at 15.1x FY17's estimated earnings with a grossed up dividend yield of 7.16%.
Suncorp is one of Australia's largest insurance groups with a market capitalisation of $17.8 billion.
It has a broad number of insurance brands which allows it to specialise in various insurance categories such as its Terri Scheer brand for landlords, Shannons for motor enthusiasts and Bingle for the price-conscious car owners.
It is also the owner of Suncorp Bank, the fifth-largest retail bank in Australia, so it is quite diversified in the financial world.
Suncorp has been hit in the last year or two thanks to the heavy storms but the weather appears to have calmed this year and the insurance industry as a whole is raising prices, meaning it's likely Suncorp could have a strong year in FY17.
Suncorp is trading at 14.7x FY17's estimated earnings with a grossed up dividend yield of 7.05%.
Foolish takeaway
All three of these large blue chips are offering big dividends which are likely to be sustained and possibly grown over the next couple of years, but don't expect much growth in profit or the share price from these levels.
If I had to choose one for the long term I'd pick Commonwealth Bank because it has the larger dividend and will probably be able to weather any changes to Australia's business environment the best out of the three.
