At the current Telstra Corporation Ltd (ASX: TLS) share price and Woolworths Limited (ASX: WOW) share price, both blue chip companies pay meaty fully franked dividend yields.
Woolworths V. Telstra Dividends
Woolies
Woolworths shares have come back from the brink when investors were growing nervous about the ongoing losses from its Masters Home Improvement business and the growth of rivals Coles and Aldi.
However, with the divestment of its Home Improvement business and a revamped management team and board, the supermarket powerhouse is attempting to reinvigorate its brand and price point. The company recently cut its dividend but is expected to yield 3% fully franked.
Telstra
Telstra shares have been sold down as investors grew nervous over a 'black hole' in its future profits, competition from the likes of TPG Telecom Ltd (ASX: TPM) and perhaps a stretched valuation.
While Telstra retains its leadership position in a number of communications markets, the company is often perceived to be a slow or no-growth business. Indeed, the company has failed to grow its profits per share materially in recent years.
Nonetheless, Telstra pays an impressive dividend to shareholders — currently forecast by analysts at 7% fully franked.
Which is better?
Both companies face headwinds and have some risks. However, if I were looking for a dividend share to buy today, I would pick Telstra before Woolies. Not only does it yield a massive dividend but it is a leader in its market.
Having said that, there are over 2,000 shares in Australia and more than 10,000 worldwide, so I'm not in any rush to buy Telstra shares. I think there are better places to invest money right now.
