While it is actually pretty easy to find a stock that pays over 5% yield, what is more important, is that the company can maintain that dividend for many years to come. A dividend safety is a very important factor for us income focused investors. For this article we will focus on dividends without franking credits. Some will include franking credits and some do not. But it’s hard to determine individual tax implications of the tax refunds, therefore, we will just focus on dividends paid without tax (franking credits).
Firstly, we need to have a few key statistics we want to see in our dividend scanner. I have selected the following;
- Dividend yield 5%+
- Dividend payout ration 0-50%
- Dividend growth rate 0.01%+
With these factors we will find a dividend yield that is 5% or more, a payout ratio that is safe (half of what they earn per share maximum), and then a positive dividend growth rate, we want a growing dividend that beats inflation to get ahead of the rest of our peers.
Using these statistics, we actually get 7 results.
APN Property Group (ASX:APD)
The share price of this stock has jumped a little over the past year. It was sitting around $0.44 to $0.45 for quite some time. I guess then it got discovered by quite a few people and the price has been steady around $0.52 for a few months now. Overall it is quite a very unexciting stock to hold, but it pays well and continues to pay well.
APN Property Group run a number of listed and unlisted property REITS investable to most Australian Citizens. I own some APD and some of their unlisted funds. APD’s dividend has been slowly growing over the past number of years and looks to continue that trend with more funds going into their listed and unlisted funds.
APD currently has a 5.19% yield and with franking credits brings this to 6.53% yield. APD are looking to changing to a stapled stock which means the franking credits will no longer be used and it will become a distribution, meaning a higher yield than at today’s price.
Mount Gibson Iron (ASX:MGX)
The share price has gone from $0.45 a share to $1.20 and back down to $0.72 in a matter of a year. While the price seems volatile, it does depend on performance. As one of many mining companies on the ASX it does have some fierce competition.
MGX has been growing its dividend since 2017, starting at $0.02 a share and now up to $0.04 a share. MGX did pay a dividend in 2014 and then didn’t pay a dividend in 2015 or 2016. This may be concerning to some who rely on the dividend income.
MGX has a current dividend yield of 5.56% and 7.93% with franking credits. This high yield share is not for those with a low risk tolerance as the dividend has been cut before and may not be completely reliable.
New Energy Solar (ASX:NEW)
The share price has slowly been declining from $1.44 down to today’s level of $1.25. The price doesn’t seem too largely volatile, although it is on a slow decline, how far will it drop?
NEW owns and invests in new solar projects. NEW has a portfolio of 4 large operating solar power plants, two in California ad two in North Carolina. According to NEW the four assets have generated in excess of 189,000 megawatt hours (MWh) of emission free electricity.
I like the idea of NEW and how they are trying to provide emission free electricity for the masses, all in the meantime, making money.
At today’s price, NEW pay’s a dividend of appromately $0.079 a share which puts it on a yield of 6.27%, with no franking credits paid.
These three stocks all pay over the 5% yield with some good growth evident. As long as the income increases, the dividend increases then you will be winning.