When it comes to dividends, it is hard to look past Westpac Banking Corp (ASX: WBC) and the rest of the big four banks.
After all, these four shares provide investors with some of the biggest yields on the Australian share market.
My favourite of the lot is Westpac and its trailing fully franked 5.9% dividend.
Whilst there may be bigger yields on the market and even in the sector, I feel that Australia's oldest bank offers investors a good mix of value, growth, and income.
Although the bank levy is likely to put pressure on Westpac and its peers, I remain confident that it has what it takes to offset this and continue its growth unabated through its out of cycle rate rises.
This could potentially put the bank in a position to raise its dividend in FY 2018.
An investment in Westpac is not without risks though. Whilst I don't expect a housing market crash to eventuate, were there to be one then the banks would come under significant pressure.
Furthermore, should bad debts rise then this could also weigh heavily on the banks. However, the good news here is that most of the major banks have noted improvements in credit quality recently.
Overall, I think this makes Westpac a good option for income investors that do not already have reasonable exposure to the banks.
