The 5 Best Australian Dividend Stocks to Buy Now
An Unrivaled Combination of Safety and Yield
Increased demand from foreign investors is acknowledgement of Australia’s strength relative to the other developed economies. This demand reflects Australia’s comparatively low public debt, strong growth, high interest rates and the reduced global pool of AAA-rated assets.
Australia was the only major country to avoid a recession in 2008-09. So not surprisingly, the Australian stock market was one of the first out of the gate, rolling up returns of nearly 130 percent from early March to mid-October 2009, in US dollar terms.
The country’s underlying strength—what saved it from the recent global recession and ensures its long-run growth—is still intact. That’s abundant natural resources and close geographic proximity to the world’s biggest market for them: Emerging Asia. Near-term worries have made Australian stocks cheap. And best of all, this is a country that likes its dividends. The ASX 100 index yields well north of 4 percent and more than twice the S&P 500, and many stocks from leading telecoms to pipeline companies yield well in the double-digits.
High-Yield Australian Stock #1
A high-yield energy stock with increasing EBITDA
High-Yield Australian Stock #1, Australia’s largest owner/operator of natural gas infrastructure assets, has emerged victorious from its nearly nine-month struggle for ownership of a lucrative energy infrastructure investment firm that owns two key pipelines running from Australia’s main onshore gas hub at Moomba, South Australia, to Adelaide, South Australia, and Queensland, New South Wales.
This deal enhances High-Yield Australian Stock #1’s already strong position in a domestic economy that’s now subject to one of the toughest carbon regulation schemes in the world. Clean-burning natural gas is very likely to assume a lead role in the race to replace coal as the primary feedstock for electricity generation Down Under.
According to a December 2011 white paper published by the Australian government’s Department of Resources, Energy and Tourism, Strengthening the Foundations for Australia’s Energy Future, Australia requires about AUD240 billion of investment in its gas and electricity industries alone over the next 20 years to ensure the country has reliable power supply. That’s on top of the billions already committed to liquefied natural gas (LNG) projects.
High-Yield Australian Stock #1 is in the right industry at the right time. Yielding over 7 percent, High-Yield Australian Stock #1 is one of our favorite picks. To find out the name of this Australian stock and our other favorite dividend payers from Down Under, enter your email address in the box below and we’ll send you the full special report, absolutely free.
High-Yield Australian Stock #2
One of the best growth-plus-income stories in the world
High-Yield Australian Stock #2 continues to benefit from one of the world’s surest trends: growing global connectivity. The company dominates the Australian fixed-line market and is also the number one provider of broadband Internet services. And it’s also emerging as a major player in the wireless business, thanks in large part to an upcoming AUD11 billion cash infusion from the Australian government.
We like High-Yield Australian Stock #2 because of its dominant position, attention to weak spots such as customer service and proven ability to fix same, and the prudence management has shown in focusing on preserving that which makes it a compelling long-term wealth-building story: its scale advantage. Enter your email below to uncover the name of this high-yield pick.
High-Yield Australian Stock #3
A low-risk energy utility with solid, near-term growth projects
Much is made of Australia’s potential as an exporter of liquefied natural gas (LNG) in a post-Fukushima world still hopeful of transitioning to cleaner-burning technologies for power generation.
High-Yield Australian Stock #3, now Australia’s biggest provider of electric power, with more than 3 million customers in four states, continues to make the case for natural gas’s domestic applications.
The company forecasts that one of its main units will continue to benefit from improved operating efficiencies, below-market average customer churn rates and the continued growth in electricity customer accounts in New South Wales.
High-Yield Australian Stock #3, like all energy utilities is fundamentally an invest-to-grow story, and that’s exactly what management continues to do effectively. This Australian stock remains a solid pick for even the most conservative investor. Here’s a quick look at some of the top Australian stocks featured in our report.
High-Yield Australian Stock #4
Natural gas distributor focused on increasing distributions
As one of Australia’s biggest distributors of natural gas to homes and businesses, High-Yield Australian Stock #3 owns about 22,200 kilometers of natural gas distribution networks and 1,120 kilometers of transmission pipelines, serving over 1.1 million household and business consumers in South Australia, Victoria, Queensland, New South Wales and the Northern Territory.
The company generates its revenue by charging retailers to transport natural gas through these networks.
Management remains focused on retaining cash to cover more of its ambitious capital program, as it works to improve its BBB- credit rating with Standard & Poor’s. Management forecast profit after tax of AUD100 million for fiscal 2013, subject to factors such as weather as well as an upcoming decision by the Australian Energy Regulator on the Victorian Access Arrangement. Management has also stated that it “remains the company’s objective to improve distributions while maintaining a prudent financial position.” This should bode well for the stock price going forward.
High-Yield Australian Stock #5
International grain handler running on all cylinders
High-Yield Australian Stock #5 is an international company with over 280 country elevators in Australia. It boasts total grain storage capacity of up to 20 million metric ton spread across more than 2,700 kilometers, from Mackay, Queensland, to Portland, Victoria. It also operates seven bulk grain export elevators, serviced by 20 contracted trains with the capability of hauling up to 4 million metric ton of grain annually. Running on all cylinders in an environment where strong demand for its services looks set to continue for the foreseeable future, High-Yield Australian Stock # is a strong buy.
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To the future of investing in Australian stocks,
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