What are the best dividend stocks of 2020/21?

Here are 20 non-bank dividend stocks to watch.

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Important note

There's no single share that's best for all investors as all our needs are different - and what's best for you might not be best for someone else. No-one can say for certain which direction stocks will go; these are investment ideas only and should not be taken as financial advice.

Dividends are one of the most important considerations for Australian investors. Well-established blue-chip companies like the banks are less likely to see substantial price growth over many years, so dividends are often seen as the key reason to invest in them.

But during a recession or crisis like COVID-19, many of these companies cut dividends to shore up capital, leaving those that rely on them scrambling. So we decided to find a list of non-bank stocks that analysts think might continue paying dividends through 2020/21.

How to pick the best dividend stocks

As you'll know, there's no "best stock". A stock that's great for one person could be a bad pick for you, so there are different ways to approach dividend stocks.

While dividend yield or dividend per share are key factors in stock picking, there's no saying whether the next five years will deliver the same results (or better or worse!).

Instead, Bell Direct's market analyst Jessica Amir said investors should note three key features when hunting for quality dividend stocks in 2020:

  • Low debt levels. You can check this in the company's profit results delivered twice a year or through its debt to equity ratio.
  • Repeated profits. Companies only pay dividends if they are profitable and the longer they've been doing so, the more likely they will this year.
  • Business as usual amid COVID-19. The company is continuing to operate or has seen an increase in activity.

Amir also advised investors not to get lured into "dividend traps" by assuming the same well-known dividend companies are the best value in 2020/21.

"Most successful investors and investment professionals stay nimble and reevaluate their holdings as the economy changes," said Amir.

"So if you are looking for dividends, be mindful that the big four banks' dividends will fall this year and remain uncertain after that, following the directive from APRA, combined with the largely uncertain economic environment."

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20 dividend stocks to watch in 2020

Below is a list of dividend stocks sourced using Bell Direct's Strategy Builder tool. Bell Direct's market analyst Jessica Amir filtered for quality stocks that have repeatedly high earnings and low debt levels which might indicate continued or increased dividend payments in the future. Although the stocks were selected in March 2020, the financial information has since been updated.

These are not recommendations, they are intended as investment ideas only.

Note: All below data is as of 7 December 2020.

1. Monash IVF Group Ltd (ASX: MVF)8. Codan Ltd (ASX: CDA)15. Data3 Ltd (ASX:DTL)
2. Zimplats Holdings Ltd (ASX: ZIM)9. Gale Pacific Ltd (ASX:GAP)16. Qube Holdings Ltd (ASX:QUB)
3. Fortescue Metals Group Ltd (ASX:FMG)10. Credit Corp Group Ltd (ASX:CCP)17. Boral Ltd (ASX:BLD)
4. Schaffer Corp Ltd (ASX: SFC)11. Bapcor Ltd (ASX:BAP)18. MNF Group Ltd (ASX:MNF)
5. Alliance Aviation Services Ltd (ASX: AQZ)12. Money3 Corp Ltd (ASX:MNY)19. Ingenia Communities Group (ASX:INA)
6. Capitol Health Ltd (ASX:CAJ)13. Evolution Mining Ltd (ASX:EVN)20. City Chic Collective Ltd (ASX:CCX)
7. SG Fleet Group Ltd (ASX: SGF)14. Ansell Ltd (ASX:ANN)

Debt to equity ratio: Compares a company's level of debt to its amount of shareholder equity. Generally speaking, the higher the ratio, the more leveraged a company is, although this ratio will differ broadly across sectors.

Price-earnings ratio: The relative value of a company's stock price to its recent profit results, i.e. the price investors are paying for every dollar of profit the company makes. A high P/E ratio might indicate investors expect growth to occur in the future and are willing to pay more for it, or it can also indicate the stock is overpriced.

1. Monash IVF Group Ltd (ASX: MVF)

Monash IVF is an Australian healthcare company offering reproductive and ultrasound services. It has primary operations in Australia, China and Malaysia.

  • Health services sector stock
  • Dividend yield: 7.28%
  • Price-earnings (P/E) ratio: 15.2
  • Debt to equity ratio: 0.2305

2. Zimplats Holdings Ltd (ASX: ZIM)

Zimplats is a platinum miner with projects based in Zimbabwe. A mining company won't be everyone's cup of tea – they can be volatile and there are ethical considerations. However, Zimplats stands out as having a high dividend and low debt levels.

  • Mining and minerals sector company
  • Dividend yield: 4.85%
  • Price-earnings (P/E) ratio: 3.5
  • Low debt to equity ratio of 0.0094

3. Fortescue Metals Group Ltd (ASX:FMG)

Fortescue Metals is a major Australian iron ore miner with operations in China and Australia. To date, it is the fourth largest iron ore producer in the world after BHP, Vale and Rio Tinto.

  • Minerals and steel sector stock
  • Dividend yield: 8.53%
  • Price-earnings (P/E) ratio: 9.9
  • Debt to equity ratio: 0.3864

4. Schaffer Corp Ltd (ASX: SFC)

Schaffer Corp is a small-cap industrials company that produces building materials and automobile leather and interiors. In the last two decades, its share price has risen by more than 300%.

  • Consumer non-durables sector stock
  • Dividend yield: 4.45%
  • Price-earnings (P/E) ratio: 10.5
  • Debt to equity ratio: 0.7546

5. Alliance Aviation Services Ltd (ASX: AQZ)

Alliance Aviation offers private aircraft charter flight services as well as aircraft sale and leasing. It operates in the tourism, government, corporate, sporting and entertainment sectors.

  • Transportation and airline sector stock
  • Dividend yield: 4.12%
  • Price-earnings (P/E) ratio: 22.9
  • Debt to equity ratio: 0.2223

6. Capitol Health Ltd (ASX:CAJ)

Capitol Health is an Australian health sector company that offers medical imaging services, including x-ray, ultrasound, mammography, nuclear medicine and bone density.

  • Health services sector stock
  • Dividend yield: 3.63%
  • Price-earnings (P/E) ratio: 223.5
  • Debt to equity ratio: 0.5517

7. SG Fleet Group Ltd (ASX: SGF)

SG Fleet Group offers vehicle fleet leasing services including salary packaging for companies and organisations. It was founded in 1986 and is headquarted in Australia.

  • Finance and leasing sector stock
  • Dividend yield: 4.32%
  • Price-earnings (P/E) ratio: 16.5
  • Debt to equity ratio: 0.7191

8. Codan Ltd (ASX: CDA)

Codan is an Australian technology company that designs and manufactures communication and metal detection equipment used primarily in mining companies.

  • Electronic and technology sector stock
  • Dividend yield: 1.76%
  • Price-earnings (P/E) ratio: 29.6
  • Debt to equity ratio: 0.1235

9. Gale Pacific Ltd (ASX:GAP)

Gale Pacific is a global manufacturer of sun and weather protective materials and products such as umbrellas, turf, garden covers, mesh, window furnishings and screens.

  • Global textiles sector stock
  • Dividend yield: 5.79%
  • Price-earnings (P/E) ratio: 26.4
  • Debt to equity ratio: 0.7499

10. Credit Corp Group Ltd (ASX:CCP)

Credit Corp is a major Australian financial services and debt collection company. It purchases and recovers debt and offers loans to impaired customers.

  • Financial services sector stock
  • Dividend yield: 2.96%
  • Price-earnings (P/E) ratio: 70.0
  • Debt to equity ratio: 0.0876

11. Bapcor Ltd (ASX:BAP)

Bapcor is a major seller of motor vehicle parts and accessories in Australia and New Zealand that also offers second-hand dealership services.

  • Distribution services sector stock
  • Dividend yield: 2.46%
  • Price-earnings (P/E) ratio: 26.5
  • Debt to equity ratio: 0.4192

12. Money3 Corp Ltd (ASX:MNY)

Money3 Corp is an Australian financial services company that offers small business and personal loans. In recent years it has made a name for itself thanks to its reliable annual dividend payment.

  • Financial sector stock
  • Dividend yield: 2.70%
  • Price-earnings (P/E) ratio: 24.7
  • Debt to equity ratio: 0.6886

13. Evolution Mining Ltd (ASX:EVN)

Evolution Mining is one of Australia's largest gold mining and exploration companies and the third biggest listed gold miner on the ASX.

  • Precious minerals and mining sector company
  • Dividend yield: 3.16%
  • Price-earnings (P/E) ratio: 28.9
  • Debt to equity ratio: 0.2456

14. Ansell Ltd (ASX:ANN)

Although once known as a condom manufacturer, today Ansell develops and distributes protective gloves and equipment for industrial and healthcare industries, including surgical gloves, face masks, goggles and protective clothing.

  • Global manufacturing sector stock
  • Dividend yield: 1.98%
  • Price-earnings (P/E) ratio: 21.8
  • Debt to equity ratio: 0.4150

15. Data3 Ltd (ASX:DTL)

Data#3 is an Australian tech company offering cloud technology services for companies in Australia and Asia Pacific. Its services include consultation, maintenance and project management.

  • Technology services sector stock
  • Dividend yield: 2.49%
  • Price-earnings (P/E) ratio: 36.4
  • Debt to equity ratio: 0.3494

16. Qube Holdings Ltd (ASX:QUB)

Qube is a logistics company offering import and export cargo freight services and products across Australia.

  • Marine and port transportation sector stock
  • Dividend yield: 1.80%
  • Price-earnings (P/E) ratio: 56.3
  • Debt to equity ratio: 0.6621

17. Boral Ltd (ASX:BLD)

Boral is a global supplier of building and construction materials including concrete, bricks, roofing, plasterboard and timber.

  • Construction materials sector company
  • Dividend yield: 4.71%
  • Price-earnings (P/E) ratio: -100000.0
  • Debt to equity ratio: 0.7682

18. MNF Group Ltd (ASX:MNF)

MNF offers data, voice and cloud telecommunication services to Australian and global individuals and businesses. Its services are primarily used in mobile app communication such as video conferencing, texts and calls.

  • Communication sector company
  • Dividend yield: 1.29%
  • Price-earnings (P/E) ratio: 33.8
  • Debt to equity ratio: 0.3666

19. Ingenia Communities Group (ASX:INA)

Ingenia Communities owns and develops retirement and lifestyle communities, including retirement villages, holiday parks and short-stay rental properties.

  • Real estate investment trust (REIT)
  • Dividend yield: 2.08%
  • Price-earnings (P/E) ratio: 39.3
  • Debt to equity ratio:

20. City Chic Collective Ltd (ASX:CCX)

City Chic Collective is a women's clothing retail chain with stores located in Australia, New Zealand, the US and South Africa.

  • Retail trade and apparels sector stock
  • Dividend yield: 0.54%
  • Price-earnings (P/E) ratio: 58.8
  • Debt to equity ratio: 0.8293

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Dividends explained


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