The fall in equities across the world has been brutal.
The ASX 200 is down this calendar year more than 8%. This means the value of almost everyone’s share portfolio has suffered but it does open some opportunities for those looking for better dividend yields.
At Credit Suisse, analysts Hasan Tevfik and Damien Boey looked at the options for investors seeking income.
And they say that the stocks attractive to income seeking investors include AGL Energy, Macquarie Group and carsales.com.
carsales.com has traditionally been considered as a growth stock but, with falling share prices, now provides a high enough yield for income investors.
“The gross dividend yield is currently 5.5% and set to grow by almost 10% a year for each of the next two years,” the analysts say.
“Our analysts believe dividend growth will be supported by revenues. Carsales.com has consistently featured as one of the most cash generative companies in Australia. Its free cash-flow margin is more than 30%.”
The companies in the table below trade on a +5% gross dividend yields and are expected to grow DPS (dividend per share) by 12% over the next two years, or about 6% a year.
“We exclude companies which are expected to struggle to cover their dividends with free cash flow,” Tevfik and Boey say.
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