Dividends are payments made by the company as a portion of its profits earned during a particular period to its stakeholders. Dividends can be paid out on a quarterly, annual, or biannual basis, depending upon the specific policies put into the framework by different corporations. Adding high dividend yield stocks to one’s portfolio is a relatively safe long-term investing strategy, which works like a source of passive income to one’s bank account.
For high income investors, dividend payments are highly attractive especially if the stock is performing well (capital appreciation) while the company has a sustainable long-term business strategy with strong fundamentals and good management, producing reliable products and the operating sector is demonstrating long term potential. The willingness to pay steady dividends over time is indicative of both financial strength and promising future prospects for the company. Very often, investors opting to invest in highest paying dividend stocks are retired professionals looking for a reliable source of income.
Dividend loving investors prefer buying and holding high quality dividend paying businesses for the long run, as these companies pay increasingly high dividends over the years, leading to an equivalent increase in the income of dividend growth investors. This gradually builds wealth while doing little brainstorming in the stock market as day trading, for instance, demands being on top of one’s portfolio on a daily basis. This, in turn, enables an investor to waste less time while pursuing other more rewarding non-investment activities.
Signs of a promising dividend stock include a strong operating sector, fiscal strength, rising dividend payments, a comparable P/E ratio, predictable and sustainable cashflow along with confidence of company insiders in the stock.
The two main risks that must be weighed well in the stock market are inflation and market risk, and dividends are popularly known among investors because they provide steady income and are considered a safe investment.
Let’s look at the following 10 ASX dividend stocks that have paid steady dividends year-on-year.
10 ASX-Listed Dividend Paying Stocks
Let’s look at the top five of all the dividend paying stocks listed above.
BHP Group Limited (ASX: BHP)
BHP Group Limited (ASX: BHP), headquartered in Melbourne, Australia, is an Anglo-Australian multinational resource (mining, metals, petroleum, iron ore, metallurgical coal and copper) dual-listed public company. Recently, the Board of the Group paid a final ordinary dividend (fully paid) of USD 0.780 (Record Date: 6 September 2019; Payment Date: 25 September 2019).
BHP Group completed the sale of its onshore US oil and gas business in October 2018 and the net proceeds of USD 10.4 billion were distributed to shareholders through a combination of an off-market buy-back in December 2018, and a special dividend in January 2019. These returns announced in respect of FY2019 delivered record annual cash returns to shareholders.
On 16 October 2019, the stock of BHP Group settled the day’s trade at a market price of AUD 36.040, down 0.111% with 5.72 million shares traded. BHP has delivered a YTD return of 11.73%.
Rio Tinto Limited (ASX: RIO)
Melbourne, Australia headquartered, Rio Tinto Limited (ASX: RIO), a subsidiary of Rio Tinto Group, is a metals and mining sector company engaged in acquisition, mining, and processing of mineral deposits across its robust project portfolio (covering eight commodities) across multiple countries. On 19 September 2019, the Group paid out a dividend of AUD 3.0758 relating to a period of six months to 30 June 2019 (Record Date: 9 August 2019).
Rio Tinto delivered a strong first half of the year 2019 (six months to 30 June 2019) with gross revenue up 3%, underlying EBITDA up 11% and underlying earnings also up 12%. During the concerned period, strong iron ore prices were partly offset by a challenging aluminium and copper market conditions.
For the subsequent three months to 30 September 2019 (third quarter of 2019), Rio Tinto again managed improved production across majority of its products with a solid result at its Pilbara mines driving increased sales of iron ore into robust markets. Going forth, the Group is confident that its approach of strong value over volume, combined with a focus on maintaining and improving operational performance and disciplined allocation of capital, would enable consistent delivery of superior returns to shareholders over the short, medium as well as long term.
On 16 October 2019, the RIO stock was priced at AUD 89.810. In addition, the stock has delivered positive returns of 23.72% YTD and 3.25% in the last 5 days.
Westpac Banking Corporation (ASX: WBC)
Australia-headquartered Westpac Banking Corporation (ASX: WBC) is an international banking and financial services group providing a range of related services in Australia, New Zealand, Asia-Pacific, and other regions worldwide. It is also one of the top four key banks in Australia. In October and September 2019, the Bank declared the following dividends on different securities-
- AUD 1.0183 on WBCPG (Record Date: 20 December 2019; Payment Date: 30 December 2019)
- AUD 0.71820 on WBCPH (Record Date: 13 December 2019; Payment Date: 23 December 2019)
- AUD 0.8578 on WBCPF (Record Date: 13 December 2019; Payment Date: 23 December 2019)
- AUD 0.6927 on WBCPE (Record Date: 13 December 2019; Payment Date: 23 December 2019)
- AUD 0.8155 on WBCPI (Record Date: 10 December 2019; Payment Date: 18 December 2019)
For the six months to 31 March 2019, Westpac had announced an unchanged dividend of AUD 0.94 as the Group delivered a statutory net profit of AUD 3.17 billion and cash earnings per share of AUD 0.96.
On 16 October 2019, the stock of Westpac Banking Corporation was priced at AUD 29.240, up 1.037% with ~ 6.80 million shares traded. Besides, WBC has delivered positive returns of 18.22% YTD, 11.05% in the last six months, and 4.06% in the last three months.
Commonwealth Bank of Australia (ASX: CBA)
Sydney, Australia-headquartered Commonwealth Bank of Australia (ASX: CBA) offers banking and associated services including institutional banking, international financing, life insurance, stock broking and others to a range of clients including small and medium sized enterprises as well as individuals customers. For the six months to 30 June 2019, the Bank announced an interim ordinary fully paid dividend of AUD 2.310 (Record Date: 15 August 2019; Payment Date: 26 September 2019), taking the full year dividend to AUD 4.31 per share.
During the financial year 2019 ended 30 June 2019, Commonwealth Bank of Australia focussed on being a better institution with a simplified business, reduction in a number of fees for customers, and investments in best technology to deliver an outstanding customer experience.
On 16 October 2019, the CBA stock price settled the day’s trade at AUD 80.430, up 1.41% by AUD 1.120. Besides, CBA has delivered positive returns of 11.75% YTD and 9.86% in the last six months.
Australia and New Zealand Banking Group Limited (ASX: ANZ)
Docklands, Australia-headquartered Australia and New Zealand Banking Group Limited (ASX: ANZ) is also a well-known financial sector enterprise offering a range of services to customers. For the first half of the year ended 31 March 2019, the Board of the Bank announced a fully franked dividend of AUD 0.80 per share (Payment Date: 1 July 2019) as the cash profit climbed up 22% to AUD 3.561 million.
ANZ has a market cap of ~ AUD 78.89 billion with ~ 2.83 billion shares outstanding. On 16 October 2019, the ANZ stock settled the day’s trading at AUD 28.160, up 1.186% by AUD 0.330 with ~ 4.62 million shares traded.
ANZ has delivered positive returns of 16.64% YTD, 6.02% in the last six months and 3.07% in the last three months.
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