4 yield stocks (maybe a share price gain too)

Financial journalist and commentator on 3AW and Sky Business
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As savings account interest rates tumble below 1.5%, many investors are forced to look for alternatives – and share market fully-franked yields have proven a natural hunting ground.

In particular, shares in the big four banks are paying dividend yields in the 5.8%–6.8% range, which are lifted above 8% on a grossed-up basis – that is, with franking credit benefits included.

But investors have to get their heads around the fact that company dividends can never be considered certain – and that there is capital (share price) risk involved in trying to harvest yield on the share market. For many, the big banks don’t offer much in the way of share price appreciation, and there is considerable concern about the sustainability of their dividend levels, under pressure from declining earnings and higher capital requirements.

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