Top 10 ASX Dividend Stocks To Buy In 2023
Thinking of investing in some high dividend-yield stocks? Well, you're not alone! Lots of investors are on the lookout for steady income streams, and we've got some exciting news for you. The Australian Securities Exchange, or ASX for short, has a bunch of blue-chip stocks that might just tickle your fancy. In fact, as of February 2023, the market is projected to yield an average dividend yield of 4% - not too shabby, right?
So, what's the deal with high-dividend-yield stocks, anyway? Why should you consider investing in them? We'll tell you all about it in this article, along with some tips on how to select the best dividend-yield shares.
There's more! We've also compiled a list of the top 10 high dividend-yield blue-chip shares on the ASX that you won't want to miss. These are the cream of the crop, folks - so be sure to add them to your portfolio.
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Top Reasons to Invest in High-Dividend Stocks
Investing in high-dividend stocks can be a sound strategy for investors seeking a steady stream of income, particularly in a low-interest-rate environment. Here are some of the top reasons to invest in high-dividend-yield stocks:
Dividends Signal Financial Strength
Investing in high dividend yield stocks can be a great way to potentially benefit from a company's solid financial position. Why? Because companies that pay consistent dividends are usually well-established, profitable, and generate consistent earnings, all of which signal financial stability and strength.
In fact, during the period from 1927 to 2014, dividend-paying stocks in the S&P 500 index actually outperformed their non-dividend-paying counterparts. The average annual return for dividend-paying stocks was an impressive 10.4%, compared to only 8.5% for non-dividend-paying stocks over the same period.
Dividend-paying stocks also showed lower volatility, with a standard deviation of only 18%. It's clear then that investing in dividend-paying stocks can provide investors with both higher returns and lower risk.
Dividend Reinvestment Plan (DRP)
One of the benefits of investing in high dividend yield stocks is the opportunity to participate in a DRP. By reinvesting dividends back into additional shares of the same stock instead of receiving cash dividends, investors can potentially generate higher returns over time.
And here's the kicker: most DRPs don't have transaction fees, which can help lower costs and boost the return on investment.
Defensive Investment Strategy
High dividend yield stocks tend to be less volatile than growth stocks during market downturns since they are usually from well-known, financially stable companies with a history of regular earnings and dividends. In contrast, growth stocks' high valuations are based on optimistic expectations of future earnings growth, making them more susceptible to fluctuations in the broader market.
By providing a greater sense of security when the market is down, high dividend yield stocks can help reduce losses and protect against market volatility.
Steady Income Stream
As Warren Buffet famously said, “If you don't make money while you sleep, you will work until you die.”
This can be a reliable source of income, especially for those who are seeking passive income.
What Are The Best Dividend Growth Stocks on ASX?
Investors seeking dividend growth stocks on the ASX may want to consider the following;
BHP Group Limited (BHP) As of February 2023, BHP offers a dividend yield of 5.80%, with a market capitalization of $202.98 billion.
Rio Tinto Limited (RIO) is another option, with a dividend yield of 9.94% and a market capitalization of $36.19 billion.
Telstra Corporation Limited (TLS) provides a more conservative option, with a dividend yield of 3.52%.
Macquarie Group Limited (MQG) is another popular dividend growth stock, despite its 24.97% decline in the past year.
New Hope Corporation Limited (NHC) and Whitehaven Coal Limited (WHC) may be worth considering due to their recent surges in share price and respectable dividend yields. Investors seeking growth and income may want to conduct further research on these companies.
ASX Ranking of The Dividend Stocks
The Australian Securities Exchange (ASX) is one of the world's leading financial markets, and it offers investors the opportunity to invest in a diverse range of assets. One of the most popular investment options on the ASX is dividend stocks. These are stocks that pay out a portion of their earnings to shareholders in the form of dividends.
The ASX ranking of dividend stocks is a list of the top dividend-paying stocks in the Australian market, and it is based on a number of factors such as the company's dividend yield, dividend growth rate, and payout ratio.
Investors often use the ASX ranking to find stocks that have always paid dividends in the past and are likely to keep doing so in the future.
Top 30 High Dividend Yield ASX Stocks
|YAL||Yancoal Australia Ltd||$5.51||0%||22.34%||22.34%||+9.11%|
|CRN||Coronado Global Resources Inc||$1.66||2%||20.41%||20.55%||-24.89%|
|NHC||New Hope Corporation Ltd||$5.34||100%||16.10%||23.01%||+61.82%|
|RF1||Regal Investment Fund||$2.81||0%||15.86%||15.86%||-29.40%|
|MFG||Magellan Financial Group Ltd||$7.89||82%||14.68%||19.84%||-47.22%|
|IHVV||Ishares S&P 500 Aud Hedged ETF||$38.56||0%||14.34%||14.34%||-5.78%|
|ACL||Australian Clinical Labs Ltd||$3.53||100%||13.60%||19.43%||-30.38%|
|VEA||Viva Energy Group Ltd||$3.12||100%||13.04%||18.64%||+15.98%|
|HLI||Helia Group Ltd||$3.18||100%||12.89%||18.42%||+5.30%|
|BFL||BSP Financial Group Ltd||$4.84||0%||12.76%||12.76%||+0.83%|
|LFG||Liberty Financial Group||$3.93||0%||12.52%||12.52%||-24.71%|
|ZIM||Zimplats Holdings Ltd||$25.23||0%||11.74%||11.74%||-18.30%|
|IVV||Ishares S&P 500 ETF||$40.98||0%||11.63%||11.63%||+5.00%|
|WDS||Woodside Energy Group Ltd||$33.66||100%||11.15%||15.93%||+8.90%|
|VSL||Vulcan Steel Ltd||$7.98||87%||10.94%||15.02%||-13.26%|
|COF||Centuria Office REIT||$1.44||0%||10.66%||10.66%||-35.13%|
|CMW||Cromwell Property Group||$0.57||0%||10.53%||10.53%||-32.94%|
|HVN||Harvey Norman Holdings Ltd||$3.60||100%||10.42%||14.88%||-28.43%|
|WHC||Whitehaven Coal Ltd||$7.29||100%||9.88%||14.11%||+57.11%|
|GNE||Genesis Energy Ltd||$2.51||0%||9.85%||9.85%||-1.95%|
|FMG||Fortescue Metals Group Ltd||$20.86||100%||9.40%||13.42%||+3.78%|
|WGB||Wam Global Ltd||$1.79||100%||9.36%||13.37%||-15.96%|
|LFS||Latitude Group Holdings Ltd||$1.29||100%||9.19%||13.12%||-29.89%|
|WAM||WAM Capital Ltd||$1.725||100%||8.99%||12.84%||-17.86%|
|SUL||Super Retail Group Ltd||$13.55||100%||8.86%||12.65%||+29.66%|
|BHP||BHP Group Ltd||$44.33||100%||8.83%||12.62%||+8.21%|
|FBU||Fletcher Building Ltd||$4.17||0%||8.68%||8.68%||-24.18%|
|MMS||Mcmillan Shakespeare Ltd||$15.40||100%||8.57%||12.24%||+28.44%|
Top 30 High Dividend Yield ASX Stocks, As of April 27th. Source: Market Index
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10 High Dividend Yield Blue Chip Shares on ASX paying more than 10% yield
Terracom Ltd (ASX: TER)
Terracom is one of the highest-yielding stocks on the ASX, with a dividend yield of 27.40% and a gross yield of 33.27%. The company does not have a dividend reinvestment plan (DRP), but investors seeking income may find the high yield attractive. Terracom has also had a strong 1-year return of 128.13%, indicating that the company has been performing well.
Although high-yielding stocks such as Terracom may carry additional risk, investors seeking income and growth may want to consider including it in their portfolio.
Yancoal Australia Ltd (ASX: YAL)
Yancoal Australia is a coal mining company that offers a dividend yield of 21.08%, surpassing the average yield for the ASX. The company has a gross dividend yield of 21.08%, and it does not offer a dividend reinvestment plan (DRP). Yancoal has seen an impressive one-year return of 79.69%, indicating its strong performance in the market.
This high-yielding stock could represent a potential opportunity for investors looking to benefit from the company's positive return and attractive dividend yield.
Coronado Global Resources Inc (ASX: CRN)
Coronado Global Resources Inc is a coal mining company that operates in the United States and Australia. It offers a high dividend yield of 20.95%, making it an attractive option for income-seeking investors. The company has no DRP in place, allowing investors to receive the full dividend payout. The gross dividend yield is the same as the dividend yield, indicating that the company has not been withholding any tax.
Coronado has had a strong one-year return of +28.20%, indicating its solid performance over the past year. Overall, Coronado Global Resources Inc can be a good choice for investors looking for a high dividend yield and growth potential.
New Hope Corporation Ltd (ASX: NHC)
New Hope Corporation Ltd is a diversified business with interests and operations spanning coal mining, exploration, port operations, oil, agriculture, innovative technologies, and investment. It boasts a trailing dividend yield of 16.54%, which is higher than the average yield for the ASX. The company has a gross dividend yield of 23.63%, indicating that it has not paid any special dividends recently.
New Hope Corporation does not offer a DRP, but investors looking for income may find the high yield attractive. In the past year, the company has delivered an impressive 1-year return of 105.53%, demonstrating its ability to generate solid returns for investors.
Tabcorp Holdings Ltd (ASX: TAH)
Tabcorp Holdings Ltd is a leading Australian gambling entertainment company with a dividend yield of 13.07%, which is above the market average. The company offers a gross yield of 18.66% and has a dividend reinvestment plan (DRP) in place, which allows shareholders to reinvest dividends in additional shares. TAH has had a 1-year return of +3.13%, indicating that it has been a stable investment option.
With a well-established position in the Australian gambling industry, Tabcorp can be an attractive investment opportunity for investors seeking a solid dividend yield, especially those interested in the entertainment sector.
Regal Investment Fund (ASX: RFI)
Regal Investment Fund is a listed investment company that invests in Australian and global shares. The company offers a dividend yield of 15.86%, which is the same as its gross yield, indicating that it has not been withholding any tax. Regal Investment Fund has a dividend reinvestment plan (DRP) in place, giving investors the option to reinvest dividends in additional shares.
The company's focus on the global shares market, coupled with its high dividend yield and DRP option, could be appealing to investors looking for a diversified portfolio that generates a steady stream of income.
Grange Resources Ltd (ASX: GRR)
Grange Resources Ltd is an Australian-based mining company that specializes in the production of high-quality iron ore. With a dividend yield of 11.65%, the company offers a respectable dividend payout to its investors. Grange Resources has a gross dividend yield of 16.64%, indicating that the company is not withholding any tax on its dividend payments.
However, Grange Resources does not currently offer a dividend reinvestment plan (DRP). Despite not having a DRP in place, the company has demonstrated a solid track record of paying dividends to its shareholders.
Smartgroup Corporation Ltd (ASX: SIQ)
Smartgroup Corporation Ltd (ASX: SIQ) is a leading provider of employee management services. With a dividend yield of 11.60%, Smartgroup offers investors an attractive source of income, especially since the company does not have a DRP in place. Its gross yield of 16.57% suggests that the company has not been withholding any tax.
Smartgroup has a track record of paying dividends consistently, with a trailing dividend payout of 66 cents per share over the past 12 months.
Zimplats Holdings Ltd (ASX: ZIM)
Zimplats Holdings Ltd is a platinum mining company operating in Zimbabwe. The company currently offers a dividend yield of 11.07%, with no dividend reinvestment plan (DRP) in place.
Zimplats Holdings Ltd has a gross dividend yield of 11.07%, meaning that the company has not been withholding any tax. Its 1-year return stands at +18.21%, indicating that the company has been performing well in the market.
As a platinum producer, Zimplats Holdings Ltd is well-positioned to benefit from rising demand for this precious metal. Investors looking for exposure to the commodities market and seeking income may want to consider adding Zimplats Holdings Ltd to their portfolio.
BSP Financial Group Ltd (ASX: BFL)
BSP Financial Group Ltd, based in Papua New Guinea, offers a dividend yield of 11.01%, making it an attractive option for investors seeking income. The company does not offer a dividend reinvestment plan (DRP) currently. With a one-year return of +7.61%, BSP Financial Group has shown stable performance over the past year, even during times of market volatility.
As one of the largest and oldest financial institutions in Papua New Guinea, BSP Financial Group offers a unique investment opportunity for those interested in the Pacific region. With its solid dividend yield and positive return, investors may want to consider including BSP Financial Group in their portfolio.
How To Select The Best Dividend Yield Shares?
When selecting the best dividend yield shares, there are several factors to consider, including:
Dividend yield: The dividend yield is calculated by dividing the annual dividend by the share price. A higher dividend yield means a higher return on investment.
Dividend payout ratio: The dividend payout ratio is the proportion of earnings paid out as dividends. A lower payout ratio indicates that the company is retaining more earnings for growth and has the potential to increase dividends in the future.
Dividend growth rate: The dividend growth rate measures the rate at which the dividend payout is increasing over time. Companies with consistent and increasing dividend payments are generally more attractive to investors.
Company fundamentals: It's essential to analyze the financial health of the company, including its revenue growth, profitability, and debt levels, to ensure the company has the capacity to continue paying dividends in the future.
Industry trends: It's important to consider the broader industry trends, including any upcoming regulatory changes or technological disruptions that could impact the company's ability to pay dividends.
For investors looking for income, the Australian Securities Exchange (ASX) has a wide range of companies with high dividend yields. The high-yield stocks listed in this article may have more risk, but they could also be good options for people who want to make money and grow their money.
Before buying any stock, even one with a high dividend yield, it is important to do sufficient research and analysis.
Remember, while a high yield is important, it's not the only factor to consider. Investors should also look at a company's financial performance, management, industry trends, and growth potential before making any investment decisions - doing your due diligence can pay off big time in the long run.
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* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.