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The Top ASX Dividend Stocks, In Our Opinion


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What Are The Best Stocks For Dividends In Australia?

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Tracey Edwards

To identify top dividend-paying stocks in Australia, investors should examine factors that signal long-term income potential. Key considerations include industry stability, with mature sectors like mining and energy typically offering more consistent dividends. Dividend yield (calculated as the annual dividend divided by the stock price) allows for easy comparison, but beware of unsustainably high yields. Prioritise companies with consistent dividend growth over the long term, reflecting management’s confidence and commitment to shareholders.

The payout ratio can determine the sustainability of dividend payments, with lower ratios indicating more room for maintaining or growing dividends. High ratios suggest overpayment at the expense of growth and stability. Lastly, a company’s financial health, including a strong balance sheet and low debt-to-equity ratio, is crucial in assessing its ability to maintain dividends, especially during economic downturns.

Dividend Stocks vs Dividend Funds

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Investing in individual dividend stocks allows investors to handpick companies that generate stable dividend income. This approach enables a focus on businesses with a solid track record, robust financial health, and strong growth potential. However, selecting and managing individual stocks can be time-consuming and requires stock analysis and market research expertise.

On the other hand, dividend funds, which include exchange-traded funds (ETFs) and managed funds, provide a diversified investment vehicle comprising a basket of dividend-paying stocks. These funds offer benefits such as instant diversification, professional management, and reduced risk. However, they often come with associated fees that can impact overall returns.

The choice between dividend stocks and funds hinges on investors’ preferences, risk tolerance, and investment goals. Investors with the knowledge and time for research may prefer individual dividend stocks, while those seeking a hands-off approach or prioritising diversification may find dividend funds more appealing. Understanding the nuances of both approaches enables investors to make informed decisions that align with their long-term financial objectives.

Note: The below list represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice. For more information on how Forbes Advisor ranks and reviews products, including how we identified our top category picks, read the methodology selection below.

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10 High-Dividend Stocks

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Tracey Edwards

Please note that the stocks are ranked according to their trailing twelve-month (TTM) dividend yield and not in order of best to worst investment opportunities. These stocks may or may not be suitable for your investment portfolio, so do your research first and seek independent financial advice before investing.


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Yancoal Australia Ltd (YAL)

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Yancoal Australia Ltd (YAL)

Dividend yield (TTM)

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Annual dividend

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Yancoal Australia Ltd (YAL)

Dividend yield (TTM)

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Annual dividend

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Why We Picked It

Yancoal Australia Ltd (YAL) is a leading coal producer concentrating on developing and operating coal projects in Australia. With a diverse portfolio of metallurgical and thermal coal mines in New South Wales and Queensland, Yancoal caters to key Asian markets. The company’s five-year trailing dividend yield of 12.87% and recent 21.88% yield show strong growth. However, investors should be cautious, considering the company didn’t pay dividends in 2021, which could happen again. As an investment, Yancoal provides exposure to Asia’s growing coal demand, supported by a diverse asset base and a solid operational track record.

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Zimplats Holdings Ltd (ZIM)

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Zimplats Holdings Ltd (ZIM)

Dividend yield (TTM)

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Annual dividend

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Zimplats Holdings Ltd (ZIM)

Dividend yield (TTM)

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Why We Picked It

Zimplats Holdings Ltd (ZIM) is a leading mining company focused on developing and producing platinum group metals (PGMs) in Zimbabwe. The company has consistently shown consistent yield, as demonstrated by its five-year trailing dividend of 9.5%. This year, the company’s yield has increased to 13.84%, showcasing its commitment to providing value to its shareholders. The strength of precious metals has significantly boosted the company’s profits, allowing for consistent and growing dividends.

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Woodside Energy Group Ltd (WDS)

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Woodside Energy Group Ltd (WDS)

Dividend yield (TTM)

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Woodside Energy Group Ltd (WDS)

Dividend yield (TTM)

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Annual dividend

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Why We Picked It

Woodside Energy Ltd, a top Australian energy company, focuses on hydrocarbon resources exploration and development. As a major regional independent oil and gas player, the company’s strong dividend growth, with a 5.95% 5-year trailing yield and a recent 10.68% yield, is partly due to rising oil prices. Investors should consider this positive sign but remain cautious about sustainability. The company has come under fire due to the emissions related to some of its projects, making it one of Australia’s largest emitters of greenhouse gasses, which may be a consideration for some investors.

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Australian Finance Group Ltd (AFG)

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Australian Finance Group Ltd (AFG)

Dividend yield (TTM)

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Annual dividend

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Australian Finance Group Ltd (AFG)

Dividend yield (TTM)

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Why We Picked It

Australian Finance Group Ltd (AFG) is a leading financial services company specialising in Australia’s mortgage broking and aggregation services. Catering to residential, commercial, and asset finance sectors, AFG partners with an extensive lender network to offer competitive options and drive growth for broker partners. The company’s five-year trailing dividend yield of 6.66% and recent 7.38% yield show strong growth, attracting investors. However, they should be cautious about the sustainability of this performance, especially with rising interest rates potentially affecting the business’s mortgage and lending brokerage components.

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Whitehaven Coal Ltd (WHC)

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Whitehaven Coal Ltd (WHC)

Dividend yield (TTM)

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Annual dividend

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Whitehaven Coal Ltd (WHC)

Dividend yield (TTM)

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Why We Picked It

Whitehaven Coal Ltd, a leading Australian coal mining company, focuses on exploring, developing, and producing high-quality thermal and metallurgical coal. Despite claims of commitment to sustainable mining and environmental responsibility, the company has been involved in several investigations relating to environmental damage caused by mines, which may deter ESG-focused investors. The company’s 9.62% five-year trailing dividend yield is fairly solid; however, the pandemic-driven rise in coal demand and cost resulted in a substantial 27.81% yield last year. This compromised a 10.72% cash dividend and 17.09% from buyback yield.

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GR Engineering Services Ltd (GNG)

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GR Engineering Services Ltd (GNG)

Dividend yield (TTM)

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GR Engineering Services Ltd (GNG)

Why We Picked It

GR Engineering Services (GNG), a leading Australian engineering and consulting firm, specialises in design and construction services for mineral processing and infrastructure sectors. The company focuses on operational excellence, safety and environmental responsibility. With commodities performing well since the pandemic, GR Engineering’s impressive five-year trailing dividend yield of 7.53% and recent 8.37% yield reflect the heightened demand for its services. The company offers exposure to the growing engineering services market, which is like a “pick-and-shovel” play for the mining and commodities sector.

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Why We Picked It

Fortescue Metals Group Ltd (FMG) is a leading Australian mining firm focused on iron-ore exploration, development, production and marketing. As a key player in the global iron ore market, the company operates in Western Australia’s world-class Pilbara region. Its impressive dividend consistency, with a five-year trailing yield of 10.22% and a recent 7.22% yield, highlights its commitment to rewarding investors. Fortescue offers exposure to the thriving iron ore industry, supported by a robust asset base and efficient operations.

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Why We Picked It

Cromwell Property Group Ltd is a notable Australian real estate firm specialising in property investment, development, and asset management. The company pursues sustainable growth strategies with a diverse portfolio across Australia and Europe. Boasting a five-year trailing dividend yield of 8.34% and a recent 11.7% yield, Cromwell showcases its commitment to investor returns. However, investors should consider rising interest rates for their potential impact on the property market.

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Why We Picked It

BHP Group Ltd (BHP) is a global resources leader, specialising in exploring, developing and producing diverse commodities like iron ore, petroleum, copper, and coal. With large-scale assets worldwide, BHP emphasises sustainable operations, innovation, and community engagement. However, there has been controversy in relation to some projects due to alleged environmental damage. The company offers investors access to the dynamic commodities market, backed by a strong asset base and well-managed operations. Its impressive dividend consistency, with a five-year trailing yield of 7.69% and last year’s 5.59%, highlights BHP’s recent strength and ability to provide a substantial return to shareholders.

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Why We Picked It

New Hope Corp Ltd (NHC) is a versatile Australian energy firm focused on coal exploration, development and production. The company operates primarily in Queensland and New South Wales and engages in oil, gas, agriculture and port operations. Committed to eco-friendly practices and community involvement, New Hope offers investors exposure to the dynamic energy market. Its consistent dividends, with a 5-year trailing yield of 7.7% and last year’s 22.41%, demonstrate the company’s ability to generate strong returns for investors. However, it’s important to note that the dividend yield from the past 12 months was compromised of a 9.75% cash dividend and 12.66% buyback yield.

How To Invest In Stocks That Pay High Dividends

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Investors should follow a few key steps to succeed in investing in high-dividend stocks.

First, conduct thorough research to assess a company’s financial health and stability, considering factors like dividend yield, growth history, and payout ratio. This helps identify companies with a strong foundation for consistent dividends.

Next, diversify your investments across different industries and sectors to minimise risk and create a well-rounded portfolio. This protects your investments and increases the potential for long-term, consistent income generation.

Lastly, regularly monitor and adjust your portfolio to stay informed about the companies you’ve invested in and address any potential issues. Monitoring and adjusting may involve rebalancing to maintain diversification or replacing underperforming stocks.

Following these steps, you can build a well-researched, diversified, and actively managed high-dividend stock portfolio. Remember to align your investment strategy with your financial goals, time horizon, and risk tolerance.


What Are Franking Credits?

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Franking credits are an additional benefit that comes with dividend-paying stocks in Australia, with their goal being to prevent double taxation.

Essentially, franking credits are a tax rebate to shareholders of an Australian company. As the company you have invested in has already paid taxes on its profits before distributing them as a dividend, the franking credit means that the equivalent amount of tax can be offset when the individual investor lodges their tax return with the Australian Tax Office (ATO).

Franking credits are a credit system unique to Australia and is one of the reasons that makes dividend-paying stocks so appealing to Australian investors. These credits have both avid supporters and opponents and have been adopted as significant campaigns in the political sphere in the past, often making the difference between winning and losing elections for the party on the “wrong” side.

When investing in Australian stocks that pay dividends, knowing if your dividend comes with franking credits is essential, as both the dividend amount and credits must be included on your tax return.


Investor Beware: Why Dividend Stocks Aren’t Always Winners

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Dividend stocks can offer attractive investment opportunities, but investors must be aware of potential risks. High dividend yields may appear appealing but sometimes signal financial distress or a struggling business. Investors should examine a company’s financial health and stability to ensure wise investment decisions.

The sustainability of dividend payments is another concern, as financial challenges may force companies to cut or eliminate dividends. Monitoring payout ratios can help assess payment sustainability, with high ratios possibly indicating threatened future payments. Additionally, investors should avoid over-concentration in dividend stocks, which can expose the portfolio to market volatility and sector-specific risks. Diversification is crucial for a well-balanced investment portfolio.

Finally, dividend investing may not suit all investors’ goals and risk tolerance. Those seeking aggressive growth or with shorter investment horizons might consider alternative strategies. By acknowledging the challenges of dividend investing and adopting a diversified, research-based approach, investors can work towards achieving their long-term financial goals.

Note: When investing, it’s possible to lose some, and very occasionally all, of your money. Past performance is no prediction of future performance and this article is not intended as a recommendation of any particular asset class, investment strategy or product.


Frequently Asked Questions (FAQs)

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Are dividends paid monthly or quarterly?

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In Australia, dividends for stock investors are typically paid either semi-annually (twice a year) or annually (once a year). However, the frequency of dividend payments can vary depending on the company and its dividend policy. Some companies may pay dividends quarterly, while others might pay monthly, but these cases are less common. Always check the specific dividend payment schedule of the company you invest in to get accurate information on when and how often dividends are paid.

How are dividends paid?

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In Australia, dividends are paid to shareholders to distribute a company’s profits. The process of dividend payment typically involves the following steps:

1. Dividend Declaration: The company’s board of directors declares a dividend, specifying the amount per share and the record date.

2. Record Date: This is the cut-off date for determining the eligible shareholders to receive the dividend. To be eligible, you must own the shares before the ex-dividend date, usually one or two business days before the record date.

3. Payment Date: This is when the dividend is paid to the shareholders. Dividends can be paid via different methods, depending on the company and shareholder preferences:

  • Direct Deposit: The dividend payment is directly deposited into the shareholder’s nominated bank or broker account. This is a common method for receiving dividends in Australia.Dividend
  • Reinvestment Plan (DRIP): Some companies offer a DRIP, which allows shareholders to reinvest their dividends to purchase additional company shares. This can be an effective way to compound your investment over time.
  • Cheque: In some cases, companies may send dividend payments by cheque, though this method is becoming less common.

It is important to note that Australian companies may pay franked or unfranked dividends. Franked dividends come with tax credits called franking credits, which represent the taxes the company has already paid on its profits. Shareholders can use these credits to offset their tax liabilities. Unfranked dividends do not carry tax credits and are taxed at the shareholder’s marginal tax rate.

Should you focus on dividends when investing?

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Dividend-paying stocks can offer steady income and diversification, making them appealing to retirees or those with lower risk tolerance. However, consider your financial goals, risk tolerance, and investment strategy before focusing on dividends.

Remember the potential for long-term growth through Dividend Reinvestment Plans (DRIPs) and the tax implications of receiving dividends. Don’t overlook the total return (dividends + capital appreciation) when evaluating investments, as focusing solely on dividend stocks may limit growth opportunities. Assess a company’s financial health, dividend sustainability, and growth prospects, as high yields can signal financial distress or limited reinvestment.

Whether to focus on dividends depends on your unique situation and objectives. Maintain a diversified portfolio that aligns with your goals and consult a financial advisor for personalised advice.

What are the best dividend stocks to buy?

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The best dividend stocks vary based on market conditions and individual investment goals. According to above analysis, some high-dividend stocks in Australia include Yancoal Australia Ltd, Zimplats Holdings Ltd, Woodside Energy Group Ltd, and Australian Finance Group Ltd, among others.

When selecting dividend stocks, consider factors such as industry stability, dividend yield, dividend growth history, payout ratio, and the company’s financial health. Always conduct thorough research and consider seeking independent financial advice from a licensed professional before investing.

Which stock pays the highest dividend?

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Dividends are not always consistent, so for this reason, the highest-dividend paying stock is forever changing.

At the time of writing, Yancoal Australia Ltd (YAL) has a recent trailing twelve-month (TTM) dividend yield of 21.88%, which is relatively high. However, it’s essential to note that a high yield might not always be sustainable, and investors should consider other factors, such as the company’s financial health, industry trends, and dividend history.

How do I make 0 a month in dividends?

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To make $500 a month in dividends, you’d first determine the total annual dividend income you need ($6,000 in this case) and then invest in stocks or funds that can achieve this return. The amount you need to invest will depend on the average dividend yield of your chosen stocks or funds. For instance, if you target an average dividend yield of 5%, you’d need to invest $120,000 ($6,000/0.05).

Diversifying your investments across various sectors and industries can also help minimise risk. Remember, the market is unpredictable, so monitoring your investments and adjusting your strategy as needed is essential.

How do I make 00 a month in dividends?

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To make $1000 a month in dividends, you’ll first need to determine the average dividend yield of the stocks or funds you’re interested in. Let’s say the average yield is 5%. To generate $12,000 a year ($1000 x 12), you’d need a principal investment of $240,000 ($12,000 divided by 0.05).

It’s important to note that this is a simplified example. Actual returns may vary based on the performance of the stocks or funds, market conditions, and other factors. Additionally, diversifying your investments and regularly monitoring and adjusting your portfolio can enhance potential returns. As always, consult with a financial advisor before making significant investment decisions.

Is it good to invest in Aussie dividends?

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In general, Australian companies pay a higher percentage of profits as dividends to their investors than many international companies. For this reason, Australian stocks often pay out some of the highest dividends in the world.

This can make Australian stocks extremely attractive to both domestic and foreign investors looking to develop a portfolio of high-dividend-yielding stocks. Many Australian stocks also provide franking credits with their dividends, which are advantageous for tax purposes, further increasing their appeal as an investment.


Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.

Patrick McGimpsey is a freelance writer passionate about crypto and its impact on the financial world. Currently working as the content lead for Australian startup CryptoTaxCalculator, Patrick has also covered the crypto industry for Canstar and The Chainsaw. Patrick has over seven years of experience in the crypto space and has previously shared his knowledge with the AML and fraud departments of Australian financial Institutions.

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