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Sunday, 06 July 2008 - 7:12 AM EST

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Downunder Dogs

Flea-bitten may be a bit harsh for some of these stocks but they are nevertheless this month’s Downunder Dogs – the stocks with the highest dividend yields among the largest 50 companies on the Australian Stock Exchange.

So what qualifies them as dogs? If you make the rather simplistic assumption that dividend levels remain more or less stable, then the dividend yield should rise as the share price falls. So by buying companies with high dividend yields you are buying shares that are out of favour – hence, “dogs”. And why would you want to buy a dog? The theory – based on the US stock-picking system known as the Dogs of the Dow – is that this year's dogs often turn out to be next year's prize pooches. Do you own these puppies?

Table 1.

The stocks with the highest dividend yields among the largest 50 companies on the Australian Stock Exchange

Code
Company name
Market cap Dividend yield Price end May
ZFX Zinifex $4,625,657,189 14.74% $9.50
GPT GPT Group $6,189,947,747 10.03% $2.88
TEL Telecom NZ $5,933,530,158 9.91% $3.25
MGR Mirvac Group $3,622,212,066 9.70% $3.29
TCL Transurban Group $6,260,488,908 9.49% $5.69
MAP Macquarie Airports $4,984,095,263 8.97% $2.90
TAH Tabcorp $5,900,179,660 8.36% $11.24
GMG Goodman $6,863,220,020 7.88% $4.00
SUN Suncorp- Metway $13,788,272,648 7.42% $14.43
IAG Insurance Aust. Grp. $7,550,583,259 7.34% $4.02

Source: Aspect Huntley.

Table 2.

The stocks with the highest dividend yields among the largest 50 companies on the Australian Stock Exchange (listed property trusts excluded)

Code
Company name
Market cap Dividend yield Price end May
ZFX Zinifex $4,625,657,189 14.74% $9.50
TEL Telecom NZ $5,933,530,158 9.91% $3.25
TCL Transurban Group $6,260,488,908 9.49% $5.69
MAP Macquarie Airports $4,984,095,263 8.97% $2.90
TAH Tabcorp $5,900,179,660 8.36% $11.24
SUN Suncorp- Metway $13,788,272,648 7.42% $14.43
IAG Insurance Aust. Grp. $7,550,583,259 7.34% $4.02
MIG Macquarie Infra. $7,185,029,373 6.67% $3.00
MQG Macquarie Group $14,967,920,766 6.33% $54.50
AMP AMP Limited $13,761,421,571 6.27% $7.34
ANZ ANZ Bank $41,660,643,010 6.27% $21.68

Listed property trusts excluded. Source: Aspect Huntley.

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