Over the last 12 months I have been very bullish on Australia's banks, but due to the rally in their respective shares I feel they now offer limited upside potential.
Because of this I wouldn't recommend starting an investment in the big four or the regional banks at this point in time. Instead I would wait for a decent pull back and focus elsewhere in the market until that happens.
In the meantime the following six shares could be great alternatives to the banks:
Dicker Data Ltd (ASX: DDR)
The shares of this wholesale distributor of computer hardware, software, and related products provide a trailing fully franked yield of 6.5%. Thanks to its strong performance year-to-date and expansion into the fast-growing cloud services market, I expect the dividend to continue to grow in FY 2017.
Flight Centre Travel Group Ltd (ASX: FLT)
This leading travel agent has suffered a difficult 12 months, but it has begun to show signs of a turnaround in its fortunes. Now could be an opportune time to grab hold of its shares, especially as they are expected to provide a fully franked 4.7% dividend in FY 2017 according to CommSec.
G8 Education Ltd (ASX: GEM)
Leading childcare operator G8 Education had a reasonably mixed first half of FY 2016, but pleasingly things have picked up so far in the second half. If this momentum can be carried through to the new financial year, then its estimated fully franked 6.6% dividend will be hard to refuse.
Japara Healthcare Ltd (ASX: JHC)
Australia's ageing population should provide Japara with significant growth for the next decade or two. I believe this could make it a great buy and hold investment. Its trailing fully franked 5.2% dividend only sweetens the deal.
Myer Holdings Ltd (ASX: MYR)
This is a controversial pick. Although I've been bearish on Myer for a long time, in recent months I've been impressed with the progress of its turnaround strategy. Furthermore, I'm optimistic that the department store operator had a strong Christmas period. So with its shares expected to provide a fully franked 4.7% dividend in FY 2017, this could be one for brave investors.
Suncorp Group Ltd (ASX: SUN)
This leading insurer is another company which has gone through a transformation. So far I've been impressed with its new operating model and expect it to result in solid earnings growth over the next few years. Its shares provide a trailing fully franked 5.3% dividend, which is hard to say no to in my opinion.
