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3 Blue-Chip Dividend Shares For 2019 And Beyond

When you buy dividend shares, you should always be looking for reliable, well-established companies. Here’s why I think shares of Cimic Group Ltd (ASX: CIM),  Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) are worthy considerations.

Why Invest In ASX Dividend Shares?

In our current environment of near rock bottom interest rates, term deposits are unlikely to provide you with the income you may require. Australian shares can be one of the best ways to invest money for long-run growth, while also receiving some return along the way in the form of dividends.

Over the past 30 years, as interest rates have collapsed from 15% to 1%, Australian shareholders in companies like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS) have reaped the benefits of generous fully franked dividends.

For those interested, the Rask Finance page here explains franking credits in detail.

Without further ado, here are three blue-chip ASX industrials that could be worthy additions to a stable dividend portfolio.

1. Sydney Airport Holdings

Sydney Airport Holdings operates the Kingsford Smith Airport on a 99-year lease that will revert back to government ownership at the end of this century. According to Sydney Airport, it generates $30.8 billion in economic activity a year, which is equivalent to 6.4% of the NSW economy.

Impressively, Sydney Airport has increased its dividend every year since FY13, often by a reasonable margin. Despite the increasing dividends, Sydney Airport’s dividend yield has been falling because the share price is up around 22% year-to-date. This places Sydney Airport shares on a trailing dividend yield of 4.7%.

One of the biggest risks for Sydney Airport is likely the new Western Sydney Airport, which is due to be completed by 2026. If this airport takes traffic from Sydney Airport, it could also take profits and put a stop to the pattern of rising dividends.

2. Cimic Group

Cimic Group is an international contractor with operations in telecommunications, engineering, property, mining and environmental services industries. Cimic operates multiple brands such as UGLCPB ContractorsThiessBroad and Sedgman.

Cimic dividends are fully-franked and shares are currently changing hands at a trailing dividend yield of 4.8%. If you can take full advantage of the franking credits (which depends on your personal tax circumstances), then the gross dividend yield would be more like 6.8%.

The Cimic share price has been declining and is down around 26% year-to-date. However, Cimic has announced several large contracts recently and the company still increased its dividend in FY19. While I think Cimic may present reasonable value today, I would proceed with caution on this one.

3. Transurban Group

Transurban owns and operates 15 toll roads in Melbourne, Sydney, Brisbane, and the greater Washington area in the US. CityLink in Melbourne is the company’s biggest asset, which accounts for nearly one-third of all toll revenue.

Revenue growth is derived from traffic growth and the company’s very own rivers of gold: inflation-protected toll prices. This inflation-protected revenue makes for a great dividend investment and it has allowed Transurban to increase its dividend consistently over the last few years.

While Transurban’s dividends are only partially franked (around 6.5%), the trailing dividend yield is a healthy ~4.1% right now. Coupled with that is a notable capital gain as well, with the Transurban share price up 26% year-to-date.

Disclosure: At the time of writing, Max has no financial interest in any of the companies mentioned.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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