Which Australian dividend stocks are looking good in 2022?

Posted: 15 November 2021 3:00 pm
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Here are the top 10 dividend stocks investors should be watching.

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The Australian share market has largely recovered from the COVID-19 pandemic, but dividends remain subdued.

Investors who are relying on dividends have seen a dramatic fall in their income since March 2020 with COVID seeing businesses slash their payments to shareholders.

Based on analysis by Plato, 2020 was the worst year for dividend investors, with a 35% reduction in dividends paid. This was led by the Big Four banks which roughly cut their dividend by 60% over 2020.

And while 2021 was a better year for investors it hasn't been as strong a recovery as many would have hoped.

The latest reporting season showed that the vast majority of businesses have announced they are halving or not paying any dividends.

So following a tumultuous 18 months for investors, we examine the top 10 dividend-paying stocks for 2022.

What is a dividend stock?

Let's take this back and answer what exactly dividends are.

Basically, a dividend is a cash payment directly to an investor from the company. It's based on the number of shares an investor owns and the dividend per share the business announces it is paying.

For example, take the Commonwealth Bank. It announced during reporting season that it was paying 98c per share to investors. If an investor owned 100 shares in the bank, they would receive $98 in dividends.

Many online share broker platforms let you filter companies by dividend, and some also have specialised research, such as dividend per share and dividend yield Morningstar analysis across sectors, included with CMC Markets Invest.

Why should you be a dividend investor?

Depending on your investment thesis, your age and your financial objectives, dividend investing might be a strategy you wish to pursue.

Dividend investing largely favours those who are seeking a passive income, but it can do so much more. An easy way to take advantage of compound interest is through dividend investing.

Most dividend-paying companies seek to raise their dividend income each year under normal trading conditions.

Investors who set up a dividend reinvestment plan will receive more shares in the company. This in turn will increase the amount of dividends they are paid in the next financial period. Repeating this cycle for long enough is a great way to add to your holdings.

Dividend investing is also a way of mitigating risks.

While share prices might move up and down, the dividend in the usual trading period remains constant if you choose the right companies.

Take for example Washington Soul Pattinson. Even during the multiple downturns the company has been able to successfully deliver on growing its dividend each year for the last 20 years.

How to buy shares

In order to buy shares investors can either go directly to market or in the vast majority of circumstances through a broker.

You have 2 main options: A do it yourself online broker or the more expensive yet more tailored advice in a full-service broker.

Prior to signing up to a broker, an investor should have an idea of the type of investor they want to be and as such the types of stocks they might want to buy.

But don't worry if you haven't got the entire thing worked out prior to your first purchase.

Regardless of the option chosen, investing in a broker is relatively straightforward, only requiring a few steps:

  1. Choose a stockbroker: Find a stockbroker such as CMC Markets that meets your criteria.
  2. Sign up for an account: You'll need to be over the age of 18 and an Australian resident to sign up.
  3. Order your stocks: Search for the company name or ticker code and set a market or limit order to buy.
  4. Pay for your shares: Ensure you have enough funds in your account ahead of the settlement date.

10 dividend stocks to watch in 2022

Below is a list of dividend stocks sourced through Finder's own research.

Setting a minimum market cap of $1 billion, Finder studied performance over 1 year, 5 years, companies' debt-to-equity ratio, volatility, annual dividend payouts, revenue growth over the last 5 years, profit margin and percentage of stock held short, to find 10 dividend stocks you should watch.


IGO Limited (IGO.AU)

IGO Limited operates as an exploration and mining company that engages in discovering, developing, and operating assets focused on metals to enable clean energy in Australia. It owns and operates a 100% interest in the Nova nickel-copper-cobalt operation located in the Great Western Woodlands, northeast of Norseman.
  • Market cap: A$7.982 billion
  • YTD performance: 57.28%
  • 1-year performance: 99.3%
  • 5-year performance: 241.84%
  • P/E ratio: 12.6087
  • Headquarters: Australia

Dexus (DXS.AU)

Dexus is one of Australia's leading real estate groups, proudly managing a high-quality Australian property portfolio valued at $32.1 billion. We believe that the strength and quality of our relationships will always be central to our success and are deeply committed to working with our customers to provide spaces that engage and inspire.
  • Market cap: A$12.015 billion
  • YTD performance: 12.78%
  • 1-year performance: 24.59%
  • 5-year performance: 28.68%
  • P/E ratio: 10.3725
  • Headquarters: Australia

Charter Hall Group (CHC.AU)

With over 30 years' experience in property investment and funds management, we're one of Australia's leading fully integrated property groups. We use our property expertise to access, deploy, manage and invest equity across our core sectors ? office, retail, industrial & logistics and social infrastructure.
  • Market cap: A$26.997 billion
  • YTD performance: 28.59%
  • 1-year performance: 61.96%
  • 5-year performance: 321.02%
  • P/E ratio: 18.2275
  • Headquarters: Australia

Pinnacle Investment Management Group Limited (PNI.AU)

Pinnacle Investment Management Group Limited operates as an investment management company in Australia. The company offers third party distribution, and fund infrastructure and support services to its affiliates and various investment managers.
  • Market cap: A$3.287 billion
  • YTD performance: 134.49%
  • 1-year performance: 187.17%
  • 5-year performance: 672.73%
  • P/E ratio: 43.3425
  • Headquarters: Australia

Australian Foundation Investment Company Limited (AFI.AU)

Australian Foundation Investment Company Limited is a publicly owned investment manager. The firm invests in the public equity markets of Australia and New Zealand.
  • Market cap: A$10.115 billion
  • YTD performance: 13.55%
  • 1-year performance: 17.74%
  • 5-year performance: 68.36%
  • P/E ratio: 43.5233
  • Headquarters: Australia

Charter Hall Retail Real Estate Investment Trust (CQR.AU)

Charter Hall Retail REIT is the leading owner and manager of property for convenience retailers. Charter Hall Retail REIT is managed by Charter Hall Group (ASX:CHC).
  • Market cap: A$2.407 billion
  • YTD performance: 10.01%
  • 1-year performance: 19.71%
  • 5-year performance: 40.35%
  • P/E ratio: 8.0747
  • Headquarters: Australia

Goodman Group (GMG.AU)

Goodman Group is an integrated property group with operations throughout Australia, New Zealand, Asia, Continental Europe, the United Kingdom, North America and Brazil. Goodman Group, comprised of the stapled entities Goodman Limited, Goodman Industrial Trust and Goodman Logistics (HK) Limited, is the largest industrial property group listed on the Australian Securities Exchange and one of the largest listed specialist investment managers of industrial property and business space globally.
  • Market cap: A$46.127 billion
  • YTD performance: 31.04%
  • 1-year performance: 49.16%
  • 5-year performance: 263.78%
  • P/E ratio: 20.131
  • Headquarters: Australia

Iluka Resources Limited (ILU.AU)

Iluka Resources Limited engages in the exploration, project development, mining, processing, marketing, and rehabilitation of mineral sands. The company operates through Jacinth-Ambrosia/Mid West, Cataby/South West, Sierra Rutile, and United States/Murray Basin segments.
  • Market cap: A$3.649 billion
  • YTD performance: 32.07%
  • 1-year performance: 50.61%
  • 5-year performance: 157.75%
  • P/E ratio: 1.5321
  • Headquarters: Australia

WAM Capital Limited (WAM.ASX)

WAM Capital Limited is a close-ended equity mutual fund launched and managed by Wilson Asset Management (International) Pty Limited. The fund invests in public equity markets of Australia.
  • Market cap: A$1.95 billion
  • YTD performance: -1.33%
  • 1-year performance: 7.29%
  • 5-year performance: 47.34%
  • P/E ratio: 6.5385
  • Headquarters: Australia

Argo Investments Limited (ARG.AU)

Argo Investments Limited is a publicly owned investment manager. The firm manages separate client focused equity portfolios for its clients.
  • Market cap: A$6.871 billion
  • YTD performance: 12.77%
  • 1-year performance: 14.41%
  • 5-year performance: 71.82%
  • P/E ratio: 40.0415
  • Headquarters: Australia



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