Eoin Treacy's view Following on from my examination of the yields offered by some of Australia's largest companies I performed a search on Bloomberg looking for companies with a dividend yield of greater than 5% (NET) and a market cap of greater than $1billion. Here are the 38 results sorted by 6-month performance using the Chart Library Performance Filter. The results of a High/Low filter indicate that 7 are making at least new 3-month highs with 7 also making at least new 3-month lows.

Three of the four largest banks are prominent on the list. This stands in stark contrast with the USA and Europe where most banks have been forced to aggressively cut their payouts. The ASX 200 Financial Index continues to yield 6.21% which is competitive by any standard and helps to cushion downside potential. The Index continues to range below the 200-day MA and a sustained move above 4600 would indicate a return to medium-term demand dominance. This chart of the ASX200 Banks Accumulation Index highlights the impact of reinvested dividends. The Index retested the 2007 peak in April and found support three weeks ago in the region of the 200-day MA. A sustained move below 45,000 would be required to further delay medium-term upside potential.

Telstra stands out for its high payout (10.45% Net covered 1.16 times) and its relative underperformance. It is also one of the top holdings in the S&P Pan Asia Dividend Aristocrats Index which indicates that the dividend has not been cut in at least seven years.

This article by Annabel Hepworth and Mitchell Bingemann for The Australian highlights the continued uncertainty regarding the National Broadband Network (NBN) which is probably contributing to the share's underperformance. Prices have stabilised mostly above A$3.40 over the last month and a sustained move back above A$3.80 will be required to indicate a return to demand dominance. However with such a high yield, investors are being paid for their patience. If subscribers have any additional insight on Telstra's underperformance we'd be happy to disseminate the information.

Coal & Allied Industries, which has a comparatively small float of 7.15million shares, yields 6.95% Net. The share has been trending consistently higher for much of the year and hit another new recovery high today. It is now testing the 2008 peak near A$120 and a sustained move below the 200-day MA would be required to question medium-term upside potential.

In common with pipeline trusts in North America, the Australian Pipeline Trust is a comparatively high yielder at 7.95% Net and continues to plot an impressively consistent medium-term uptrend. A sustained move below the 200-day MA, currently near A$3.66 would be required to question medium-term upside potential. (Also see Comment of the Day on October 1st).