In his market commentary this morning my colleague Ric Spooner referred to dividend yield investors. This prompted a discussion around this style of investing, and the question arose "which has the best yield?".

So I plugged the recent dividends and my best estimates of future dividends for Telstra and the big four banks into the calculator to produce the table above. The usual conditions apply. Owning shares is different to a cash deposit. Perhaps most importantly, share investors have capital risk - share prices can go down and up. Additionally, future dividends can change. The numbers above in purple are estimates only.

In my view the dividend outlook for these shares varies. I estimate CBA dividends will grow at 2%, while the other three major banks hold their dividends steady. At their earnings announcement this week Telstra unveiled a dividend of 15.5 cents pers share against earnings per share of 14.8 cents. I took comments from CEO Andy Penn that capital management issues are under examination as a hint that the dividend will be cut.

Sustainable dividend yields are of particular interest to investors with longer time frames. An income stream well above current interest rates means investors can hold on through market storms, and still receive returns. But dividends can vary.  This table shows the yields if dividends are cut, or slashed: