If you are looking for ASX blue chip dividend share ideas, Wesfarmers Ltd (ASX: WES) shares, Telstra Corporation Ltd (ASX: TLS) shares, National Australia Bank Ltd. (ASX: NAB) shares, BHP Billiton Limited (ASX: BHP) shares and APA Group (ASX: APA) shares should be on your watchlist.
1. Wesfarmers: Wesfarmers is the owner of Coles, Kmart, Bunnings Warehouse, Target, Officeworks and some industrial businesses. Thanks to its conglomerate-type structure, Wesfarmers offers defensive characteristics and a reliable dividend stream. It is tipped to pay a dividend equivalent to a yield of 5% in the year ahead.
2. Telstra: The Telstra share price has fallen 14% over the past year as investors adjusted to lower growth in the telecommunications industry and higher interest rates. While higher interest rates could detract away from the appeal of holding Telstra shares, it is forecast to pay a 6.8% dividend — fully franked, no less.
3. National Australia Bank: NAB is the highest yielding big bank share on the ASX, with a forecast payout of 6% fully franked. The bank has come a long way since the Global Financial Crisis (GFC). It has sold its US assets, got rid of billions of dollars of bad debts, divested its UK bank and most of its insurance business. The market has rewarded it with a rising share price.
4. BHP Billiton: BHP shares have also rallied ferociously over the past 12 months — it is up 34%! The 'Big Australian' has been a direct beneficiary of China's enormous fiscal stimulus, which kept its infrastructure investment alive and buoyed commodity prices such as iron ore. A rebound in oil prices also propelled the BHP share price. It is tipped to pay a dividend equivalent to a yield of 5.3%.
5. APA Group: APA Group is Australia's largest natural gas infrastructure business. With an extensive network of pipelines and storage facilities, you can think of it as Australia's toll road and carpark for natural gas. The defensive business is being tipped by analysts to pay a dividend of 4.9%.
6. Vocus Group Ltd (ASX: VOC): In Australia, Vocus is the owner of Dodo, iPrimus and Commander retail telecommunications and utility brands as well as the Vocus and Engin corporate brands. In New Zealand, it owns Slingshot, Switch, Flip, Callplus, Orcon and 2Talk. The company is still digesting its acquisition of Amcom and M2, but also expanding into mobiles and utilities. The company offers a 3.3% fully franked dividend yield.
7. Sydney Airport Holdings Ltd (ASX: SYD): Sydney Airport owns (yep, you guessed it!) Sydney Airport — Australia's busiest port for entry and exit. The company stands at the beginning of what is likely to be a large multi-decade runway of tourists and migrants. However, there is currently some uncertainty whether it will take part in the Western Sydney Airport project. It yields 5.1%.
8. Transurban Group (ASX: TCL): From the air to the land, Transurban is Australia's toll road operator, dominating the key highways in and out of Melbourne, Sydney and Brisbane. For example, it owns Citylink, Hills M2, the Lane Cove Tunnel and Airport Link M7 (amongst others). Analysts expect dividends of 5.1% over the next year.
9. Mantra Group Ltd (ASX: MTR): Mantra is Australia's second-largest owner of hotels and resorts. In addition to Mantra hotels, it owns Peppers. With an extensive property portfolio, Mantra ties in with the theme of rising tourism. The company is tipped to offer a 5.2% fully franked dividend.
10. RCG Corporation Ltd (ASX: RCG): Last but not least, RCG is the owner of popular footwear stores such as The Athlete's Foot, Hype DC, Platypus, ShuBar and more. It is also the exclusive distributor of brands like Merrell, Timberland and Saucony, among others. The company has grown by acquisition and although growth may be harder to come by in the future, it is tipped to offer a 6% fully franked dividend.
Foolish Takeaway
Not all of these companies are a buy at today's prices. However, dividends can be a fantastic way to grow your wealth over the long-term. And in the short term, dividend income is far more reliable than capital gains from share price increases.
There are risks, of course, so you shouldn't put all your eggs in one basket. But it pays to remember, too, that dividends from Australian shares can be extremely tax-effective if you structure your portfolio correctly.
