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Investors invest in Dividend paying stocks so that they could enjoy the benefits of steady payments; however, at the same time, investors can also put their money in the bank and earn interest on it. Putting money in the bank is much less risky than buying shares, but despite this, many investors prefer to invest in shares rather than Bank as there is an opportunity for investors to earn dividends on the shares and generate wealth over the long haul.
Further, Dividend-paying stocks absorb the volatility risks and safeguard stock portfolios of investors which makes them more attractive to investors in the times of crisis. Dividend stocks are usually judged on the basis of their dividend yield which is calculated by dividing dividend per share (DPS) by the stock's market price.
Investors compare dividend yield of stock with the interest rate, and on that basis, they decide if they want to go for a dividend share or to the bank for investment.
Currently, in Australia, the interest rates are kept very low by the Reserve Bank of Australia due to which investors are looking for Dividend shares to earn a steady income. Let's take a look at some of the dividend stocks that are traded on the ASX platform:
National Australia Bank Limited (ASX:NAB)
Australiaâs Leading bank, National Australia Bank Limited (ASX:NAB) reported Net profit attributable to owners of NAB (statutory net profit) of $5,554 million. During FY 2018, the company paid an interim dividend of 99 cents per share and a final dividend of 99 cents per share taking the full year dividend to $1.98. Over the past few years, the bank has managed to maintain its healthy dividend payout ratio with 100% franking facility. The annual dividend yield of the bank is about 5.8% on a five-year average basis (FY14-18). At the time of writing (22 February 2019, AEST 3:23 PM), NABâs shares traded at $24.70 with an annual dividend yield of 8.01%.
Transurban Group (ASX:TCL)
Leading toll road operator, Transurban Group (ASX:TCL) recently reported a statutory profit of $145 million for the first half of FY 2019. The companyâs board has declared a 1H19 distribution of 29.0 cents per security for 1H FY 2019. For the financial year 2019, the board has reaffirmed distribution guidance at 59.0 cps, representing growth of 5.4% over FY 2018.
In FY 2018, Transurban Group reported Net profit attributable to security holders of $485 million, and it paid a total distribution of 56.0 cents per stapled security. The annual dividend yield of the company is about 4.4% on a five-year average basis (FY14-18). At the time of writing (22 February 2019, AEST 03:23 PM), TCLâs shares traded at $12.550, with an annual dividend yield of 4.6%..
Tabcorp Holdings Limited (ASX:TAH)
Australian gambling entertainment company, Tabcorp Holdings Limited (ASX:TAH) has recently reported a Net profit for the period attributable to members of $182.5 million for H1 FY 2019. The Board has declared an interim dividend of 11 cents per share, 100% franked, payable on 13 March 2019. In FY 2018, the company reported a Net profit for the period attributable to members of $28.7 million and paid a total dividend of 21.0 cents per share. The annual dividend yield of the company is about 5.03% on a five-year average basis (FY14-18). At the time of writing (22 February 2019, AEST 03:23 PM), TAHâs shares traded at $4.680, with an annual dividend yield of 4.61 percent.
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