The below is a preview from our High Yield Stocks research report. To view this report in full visit the Patersons Client Portal.
Dividend Model Update
Top Sustainable Dividend Stocks
The highest yielding ASX200 stocks, excluding Infrastructure & REITs, as rated by our models as sustainable are:
With global and Australian interest rates at historical lows, the ability to identify companies with sustainable dividend yields will be crucial for income investors in the short to medium term. Combined with global growth concerns, low interest rates mean a sustainable dividend paying, high quality company should be a key component for an income portfolio.
The historic grossed up dividend yield of the ASX200 industrials has remained fairly consistent at ~5.5% over the past eight years while 12-month term deposits have fallen from 6% to just above 2% over the same period.
The Australian infrastructure and listed property companies have performed well over the past year as bond yields have fallen.
There is strong evidence to suggest traders can capture alpha (excess returns) if they buy sustainable fully franked high yielding stocks 30-40 trading days before the company goes ex-dividend. Income investors will begin to focus their attention on the upcoming June year end reporting season.
Upcoming high yield cum-div ASX200 stocks are highlighted below.
||Rio Tinto Limited
||Suncorp Group Ltd
||TABCORP Holdings Ltd
||AGL Energy Limited
||JB Hi-Fi Limited
||QBE Insurance Group
||Aurizon Holdings Ltd
Each month we run a stress test based on four factors to find companies that are most at risk of a dividend cut for the coming year. ASX200 stocks most at risk are highlighted below:
Warning: This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate to your particular investment objectives, financial situation or particular needs. Prior to making any investment decision, you should assess, or seek advice from your Adviser, on whether any relevant part of this report is appropriate to your financial circumstances and investment objectives.