Dividends can be one of the most important considerations for Australian investors, especially those who are looking to live off the income their shares provide. Well-established blue-chip companies like the banks are less likely to see substantial share price growth over many years, so dividends are often seen as the key reason to invest in them.
Given the importance of dividends and the difficulty investors have had over the last few years finding a sustainable payout due to the aftermath of global disruptions, we thought we would put together a list of non-banking best dividend stocks to keep an eye on in 2024.
To help generate a list, we reached out to Bell Direct's head of distribution Tim Sparks who sent us 20 thought starters you might keep your eye on in 2024.
Important note
Unfortunately there's no one magic stock that is 'best' for everyone. Instead, you should look into your own portfolio, your individual needs and your investment strategy to decide what stock is right for you. Further still, nobody can say for certain which direction a share will go as past performance is no guarantee of future results. So keep in mind these are stock ideas only and should not be taken as personal financial advice.
20 top dividend stocks on the ASX to watch in 2024
Please note the below are not share trading recommendations. They are simply investing ideas. Before trading you should do your own research to determine if any of the below are right for you.
With a market capitalisation of $2.3 billion, Zimplats Holdings specialises in mining platinum group metals. The company's strategic focus has resulted in a healthy dividend yield of 12%, complimented by a total shareholder return (TSR) of 473% over the 2018–23 period. Earnings per share have seen a notable upward trajectory, far outstripping the share price increase.
Despite a slight recent retreat in share value, Zimplats' historical earnings growth and a low price-to-earnings (P/E) ratio underscore a positive sign for investors.
Yancoal Australia Ltd sits is in the energy minerals sector, boasting a market capitalisation of $4.23 billion. The company has an attractive dividend yield of 15%, including a payout of $1.07 per share in 2023. Yancoal oversees extensive operations in New South Wales, Queensland and Western Australia with a history of contributing over $10 billion in foreign direct investment to Australia since 2004.
While the dividend yield is significant, it's also closely tied to the volatile coal market, a factor for investors to consider due to its impact on the company's financial distributions.
3. BSP Financial Group Ltd (ASX:BFL)
Finance
Dividend yield: 9.91%
P/E ratio: 7.6533
Net profit margin: ‪33.72%
BSP Financial Group Ltd is a key player in the finance sector. The company offers a substantial dividend yield of 11.97%, showcasing its commitment to delivering significant returns to investors. The P/E ratio of 5.34 suggests an attractive valuation relative to its earnings.
Remarkably, BSP Financial Group boasts a high net profit margin of 43.42%, indicating exceptional profitability and financial management in its operations
WAM Capital Ltd is an investment company within the finance sector, boasting a market capitalisation of $1.64 billion and operating out of NSW, Australia. The company upheld a consistent dividend payment in FY2023, with a full-year dividend matching the previous year at 15.5 cents per share, fully franked.
In the 2022–23 financial year, WAM Capital reported an operating profit before tax of $233.2 million, a remarkable recovery from the prior year's loss. Its investment portfolio returned 18.2% over 12 months to 30 June 2023.
5. APM Human Services International Ltd (ASX:APM)
Human services
Dividend yield: 9.20%
P/E ratio: 20.375
Net profit margin: ‪3.42%
APM is a multi-national human services provider based in Perth, Australia. The company specialises in employment services and is in the commercial and professional services industry. Having launched in 1994, today it has a market capitalisation of $1.48B and currently operates in over 10 countries including Australia, the US, Canada, the UK, New Zealand and Singapore.
The company offers investors a company with solid foundations as well as one looking to the future with sustainability and community as a focus. APM's revenue for FY23 was $1,896.4m and the total dividend per share was $0.10.
6. Liberty Financial Group Pty Ltd (ASX:LFG)
Finance
Dividend yield: 8.72%
P/E ratio: 6.5932
Net profit margin: ‪28.84%
Liberty Financial Group Pty Ltd, functioning in the finance sector, offers a range of lending and financial services. The company provides a dividend yield of 8.83%, demonstrating its ability to generate investor returns. Its P/E ratio is 6.75, indicating a reasonable market valuation compared to its earnings. The net profit margin of 28.84% showcases Liberty Financial Group's strong profitability and effective financial management.
7. Metrics Master Income Trust Unit (ASX:MXT)
Finance
Dividend yield: 8.51%
P/E ratio: 13.8
Net profit margin: ‪0.00%
Metrics Master Income Trust Unit, with a market cap of $1.783 billion, invests in Australian corporate loans aimed at delivering stable income mainly through interest payments.
The latest dividend from MXT was $0.01 per share, distributed on 9 October 2023, and was not franked, implying full tax liability for the investors on those dividends.
Operating in the materials sector, Fortescue Ltd boasts an impressive market capitalisation of $78.08B and is the world's fourth largest iron ore producer. It is currently based out of Perth, Western Australia and is a top 10 ASX listed company.
Fortescue has been a consistent performer for shareholders and also regularly distributes dividends. HY results to December 2023 show a net profit after tax of US$3.3 billion and earnings per share of US$1.08, an increase of 41%. The most recent dividend was A$1.08 per share, fully franked, as part of the HY results.
9. Accent Group Ltd (ASX:AX1)
Distribution Services
Dividend yield: 8.37%
P/E ratio: 15.6154
Net profit margin: ‪5.17%
Accent Group operates in the consumer retail industry and has a current market capitalisation of $1.14B. The group has a number of large and recognisable brands under its umbrella, largely in footwear, athleisure and streetwear, including Sketchers, The Athlete's Foot, Dr Martens, UGG and Vans.
Investing in Accent Group gives you access to a portfolio of brands and therefore consumers. As of FY23 it counted over 820 retail stores across 26 retail banners and held exclusive distribution rights for 17 international brands across Australia and New Zealand. In FY23, the group's net profit after tax was $89 million and dividends were 5.50 cents per share fully franked.
10. Dalrymple Bay Infrastructure Ltd (ASX:DBI)
Construction
Dividend yield: 7.85%
P/E ratio: 18.2667
Net profit margin: ‪11.29%
Dalrymple Bay Infrastructure Ltd, engaged in the construction sector, specializes in infrastructure-related projects. The company has a dividend yield of 7.99%, suggesting a solid return for shareholders. Its P/E ratio stands at 13.68, reflecting market valuation relative to its earnings. The net profit margin of 14.29% indicates a healthy level of profitability in its operations.
IGO Ltd, with a market capitalisation of $5.9 billion, marks its territory in the non-energy minerals market, illustrating its robust position. The company offers investors a dividend yield of 7.67% and a P/E ratio of 10.66, reflecting its financial stability and growth prospects.
A net profit margin of 53.63% indicates effective management and a strong financial framework. For investors drawn to the sector, IGO Ltd might present itself as an engaging option, backed by solid market capitalisation and promising financial metrics.
Fletcher Building is a New Zealand company that has been operating since 1915. Today, it operates across New Zealand, Australia and the South Pacific and it has a market capitalisation of $3.01B. Operating in the capital goods industry, Fletcher Building engages in manufacturing, home building, construction and infrastructure, distribution and retail. It currently employs almost 15,000 people.
Fletcher Building is listed on both the ASX and NZX. FY23 performance shows revenue of $3.01B and $235m in net earnings. Shareholders received 2 dividends in FY23 fully franked, resulting in a total dividend of 34 cents per share.
13. Mcmillan Shakespeare Ltd (ASX:MMS)
Salary packaging services
Dividend yield: 7.74%
P/E ratio: 18.875
Net profit margin: ‪7.14%
McMillan Shakespeare Ltd operates within the financial sector, offering salary packaging and vehicle leasing services. The company, with a market capitalisation of $1.2 billion and 1,290 employees as of 2023, has established itself as a key player in financial outsourcing.
Over the 2020–23 period, investors have witnessed a return of 110%, inclusive of dividends and capital growth. The company has shown robust long-term performance with a 1-year shareholder return of 33%. The company's earnings per share has surged annually at an impressive rate, potentially signalling earnings growth despite the share price experiencing a short-term decline.
14. Helia Group Limited (ASX:HLI)
Finance
Dividend yield: 7.67%
P/E ratio: 4.6
Net profit margin: ‪52.38%
Helia Group Limited (ASX:HLI) is an Australian financial services company that provides Lenders Mortgage Insurance (LMI). It has been operating since 1965. The company is headquartered in Sydney, Australia, and currently has a market capitalisation of $1.26B.
The company delivered strong results for FY23 which included statutory net profit after tax of $275.1m, an increase of 37% from the prior year. Shareholders also received a fully franked dividend of 15 cents per share and an unfranked special dividend of 30 cents per share. Helia Group benefits from a strong loan market, low delinquencies and brand partnerships, including CBA and ING.
Growthpoint Properties Australia is a real estate investment trust listed on the ASX with a market capitalisation of $1.57 billion. It has maintained a dividend yield of approximately 10%, although its 5-year performance in the 2018–23 period shows a downward trend in share value and total shareholder return.
This decline is echoed in the earnings per share, which has diminished over the same period, reflecting the challenges faced in the real estate sector.
Atlas Alteria is a global transport operator which specialises in toll roads. It currently has projects in France, Germany and the US and a market capitalisation of $7.79B. One of the company's notable projects is the Chicago Skyway, a 12.5km elevated toll road in which the company owns a 66.67% interest.
The company has a history of delivering dividends to investors. FY23 results showed net profit after tax of $256.3 million, up from FY22. Overall, Atlas Arteria offers investors an opportunity to invest in a stable and diversified toll road portfolio, with a history of strong financial performance and a commitment to delivering returns through dividends.
Insignia Financial Ltd is a financial services company based in Melbourne with a market capitalisation of $1.47 billion. The company has reduced its dividend to $0.093, resulting in an 8.69% yield.
Insignia's dividend history shows volatility with an average annual decline of 7.8% over the last decade. The company's earnings per share (EPS) have been declining over the 2018–23 period.
New Hope Corporation, based in Australia, is a diversified energy company with significant interests in coal mining, exploration, and development. As of 2023, the company maintains a strong market presence with a market capitalisation of $4.3 billion, demonstrating its robust position in the energy sector.
New Hope Corporation is known for its efficient operations and commitment to sustainable mining practices. With a dividend yield of 7.97%, it offers investors a competitive return, indicative of its steady financial performance. The earnings per share stand at $0.24, reflecting the company's ability to generate consistent profits and maintain a healthy dividend payout for its shareholders.
Pilbara Minerals Ltd, a standout in the non-energy minerals sector, boasts a market capitalisation of $10.8 billion, highlighting its significant presence on the ASX. The company attracts with a dividend yield of 7.89% and a P/E ratio of 4.51, underscoring its value proposition against earnings . Its impressive net profit margin of 58.84% showcases operational efficiency and profitability. For those exploring opportunities within non-energy minerals, Pilbara Minerals Ltd's financial health and performance metrics suggest it's a contender worth considering.
Woodside Energy Group, with a market cap of $65.62 billion, stands as Australia's largest independent oil and gas company. The company's dividend yield is significant at 9.82% as of October 2023, despite a 27% decrease in the interim dividend from the previous year.
In Q3 of 2023, Woodside reported an 8% increase in production and a 6% increase in revenue from the preceding quarter, although lower realised prices affected returns.
How did we pick the best dividend stock list?
We filtered Australian stocks that had been public for at least 5 years with market caps of over $1 billion and then selected the 20 stocks with the highest yield.
Debt-to-equity (D/E) 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 (P/E) 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.
Switch online brokers and save
Did you know you can save $1,046 in brokerage fees every year on average by switching to a cheaper share trading platform? Check out fees and features in our comparison table to find a better deal today.
We looked at the brokerage fees across 23 different share trading platforms and based the calculation on the average 6.7 trades made per week by Australian investors (source: ASIC) with trade values of $1,000 on ASX shares. To find out how we rank share trading platforms, you can read our ranking methodology.
How to pick the ASX best dividend stocks
Dividend investors will typically look for the following attributes when selecting their ASX dividen stocks:
Low debt levels. You can check this in the company's profit results delivered twice a year or through its debt-to-equity (D/E) 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 despite hiccups. The company is continuing to operate or has seen an increase in activity.
Bell Direct's head of distribution Tim Sparks also gave the following tips:
"When searching for dividend stocks, investors should be looking for companies with consistent, reliable cash flows from a product or service with a clear competitive advantage. Ultimately it is profit from these cash flows that will lead to dividends," Sparks says.
He also cautioned investors of the risks of dividend traps, highlighting the need to analyse 2 key metrics before purchasing dividend shares.
"The first is to look at the company's historical dividends to make sure they are consistent. The second – look at the company's dividend payout ratio and ensure it didn't suddenly increase based on a one-off event," Sparks explains.
"The average dividend yield for an ASX 200 company is about 4%. If a stock is yielding say 15% then it is unlikely this can be maintained and that stock needs further analysis to avoid disappointment."
Video: Dividends explained
Found the best dividend stocks? Buy through an online broker
To buy dividend stocks, you'll need to sign up to an online broker. You can use the table below to compare online brokers (also known as share trading platforms) available in Australia.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Frequently asked questions
As a shareholder, you're entitled to company profits of any stocks you own. Public companies pay out these profits to shareholders in the form of dividends. If a company makes no profits or chooses to re-invest their earnings to grow the company, they wont pay a dividend. For more on this, check out our guide on dividend payments.
Franking credits, or imputation credits, are a type of tax break for shareholders who receive dividends from companies that have already paid tax on their profits. Company profits are already taxed at the corporate rate of 30%, so to avoid investors paying income tax for a second time on the dividends they receive, franking credits are offered to reduce the tax bills of shareholders by the amount that has already been paid by the company. For more on this, check out our guide on franking credits.
Dividends are typically paid out twice a year, although some companies may pay once a year, or in special cases, a few times a year.
Dividends in Australia are paid after the release of the company's half year or full year results. The exact date will be released with the results.
Image source: Getty
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Kylie Purcell is the senior investments editor and analyst at Finder. She has completed a Certificate of Securities and Managed Investments (RG146) and specialises in investment products including online brokers, robo-advisors, stocks and ETFs.
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