Do you want to invest in Australian blue chip shares with good dividends? If so, then you need to know how to identify them. Making the wrong choice can lead to disappointing results. While investment always carries risk, there is a lot you can do to minimise that risk and make investments that are well-researched and stable.
In this article, we will discuss the key factors you need to look at when trying to identify Australian blue chip shares with good dividends. So, if you’re ready to start investing, keep reading!
Payout performance
When it comes to finding Australian blue chip shares with good dividends, the first thing you need to look at is the company’s history of payouts. A company’s financial history will give you an idea of how much they have paid out in previous years and whether or not they are likely to continue paying out in the future. To find this information, you can look at the company’s financial reports or annual reports.
Dividend cover
This is another key factor to consider when looking for Australian blue chip shares with good dividends. This is a measure of how much cash the company has available to pay and is calculated by dividing the company’s cash flow from operations by the number of payouts. A company with a high dividend cover is more likely to be able to continue making considerable payouts in the future, even if its profits start to decline.
Profitability
You should also consider the profitability of the company. This is because the payout is usually linked to its profits. A consistently profitable company is more likely to be able to maintain or increase its payout in the future.
Market stability
Of course, you also need to consider the overall stability of the Australian share market. This is because a company’s payout is usually linked to its share price. If the market is volatile, then this could have an impact on a company’s ability to pay in the future.
You also need to consider the market of the industry the company is in. If the industry is in a downturn, this will likely impact the company’s share price and payout.
However, it is important to remember that past performance is not necessarily indicative of future results. So, while these factors are important to consider, you should not make your investment decision solely on them. Instead, you should also do your own research into the company and its prospects before making an investment.
Get professional advice
Investing in Australian blue chip shares with good dividends can be a great way to grow your wealth over the long term. However, it is important to remember that there are risks involved, and you could lose money. So, if you’re thinking of investing, it’s a good idea to speak to a professional financial advisor first. They can help you assess your risk tolerance and investment goals and make sure you are investing in the right options for you.
Just like with the investment itself, you need to research and assess the financial advisor to make sure they are reputable and have your best interests at heart. It can be easy to get caught up in the hype of a “hot tip”, but you need to remember that not every investment will be successful. Consider their liability, fees, past performance, and investment strategies before making a decision.
Ready to invest?
Australian blue chip shares with good dividends can be a great addition to your investment portfolio. However, it’s important to remember that there is risk involved, and you could lose money. So, if you’re thinking of investing in Australian blue chip shares with good dividends, make sure you do your research and speak to a professional financial advisor first.
