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4 stocks to beat Telstra’s dividend yield in 2014

Reported by Tim McArthur, The Motley Fool.
Monday, December 30, 2013
Topics in this article:
Asx,Westpac Banking Corporation,Telstra Corporation.,Leighton Holdings,Metcash,Monadelphous
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Throughout 2013 Telstra (ASX: TLS) has been a 'go-to' stock for investors looking for a reliable stream of dividends to provide a yield above what they can receive from a savings account.

As the dividend yield an investor receives on a stock is directly related to the price they purchase the stock at, available yields are constantly changing. A review of the top 100 industrial stocks highlights that there are 25 companies which have historic dividend yields above Telstra's. Of course investors are more interested in future dividends than past ones.

Utilising Morningstar's analyst consensus data, Telstra is forecast to pay 29 cents per share (cps) in dividends in financial year (FY) 2014. This suggests a dividend yield of 5.5%. Here are four top 100 stocks that at current prices are forecast to provide shareholders with yields above Telstra's in the current financial year.

Westpac Bank (ASX: WBC) is forecast to pay 182 cps in dividends. With a current share price of $32.19 this represents a forecast yield of 5.65%.

Leighton Holdings (ASX: LEI) is forecast to boost its dividend from 80 cps to 95.5 cps in FY 2014. With a current share price of $16.44 this equates to a dividend yield of 5.8% (50% franked).

Monadelphous (ASX: MND) operates in the mining and engineering contracting sector. Business is expected to continue to be tough in FY 2014, with the dividend forecast to decline from 137 cps to 121.7 cps. However with the shares currently trading at $18.34 a dividend yield of 6.6% is still available to shareholders.

Metcash (ASX: MTS) has a forecast dividend yield significantly below its historic yield, however it’s still appealing. With the grocery wholesaler forecast to pay 19.8 cps in dividends in FY 2014, the stock currently trades on a forecast yield of 6.2%.

Foolish takeaway

The beauty of Telstra is the reliable and defensive nature of the company's earnings and ability to maintain steady dividends. For investors prepared to take on slightly more risk, there are a number of quality companies with stocks offering higher dividend yields.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

23/10/2014 20:25Sydney, Australia. 23 October,2014
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