Recent market moves have reflected the rotation of investors from yield to growth stocks. As we have discussed in our updates, over the last few months the “yield trade” has reversed rapidly. There are signs of a prospect of higher interest rates and less accommodative central banks policies across the globe, which has seen funds flow out of high dividend paying stocks which benefited the most from low bond yields since the global financial crisis.
In saying that, there is still certainly a place for dividend yield stocks in a balanced portfolio. Further, given recent market moves, most traditional yield stocks are priced at much more attractive levels than they have been in recent years.
Investors should not simply blindly invest in the highest dividend paying stocks. A company’s fundamentals and earnings drivers must also be assessed, in particular in relation to dividend sustainability.
Keeping this in mind our top 6 dividend stock ideas across AU/NZ are:
Spark (SPK.NZ / SPK.AX) Telstra (TLS.AX)
PGG Wrightson (PGW.NZ) Generation Healthcare REIT (GHC.AX)
Tourism Holdings (THL.NZ) Crown Resorts (CWN.AX)
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