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Highlights
- Woolworths gains 6.6% in 2025 YTD
- Strong dividend history and defensive business model
- Lower volatility appeal in consumer staples sector
The share price of Woolworths Group (ASX:WOW) has climbed 6.6% since the beginning of 2025, sparking renewed attention from market watchers. As a dominant player in Australia's retail and grocery landscape, Woolworths is often viewed as a cornerstone in the ASX dividend stocks category due to its dependable performance and stable payouts.
Founded in 1924, Woolworths operates over 3,000 stores across Australia and New Zealand, employing more than 100,000 people. Its supermarket chains – Woolworths in Australia and Countdown in New Zealand – are household names, supported by operations in the discount retail space through Big W and food distribution via PFD. A commanding market share of over 35% in Australia’s grocery sector gives Woolworths both pricing power and operational efficiency.
Consumer staples companies like Woolworths tend to offer steady returns, even in times of market volatility. The S&P/ASX200 Consumer Staples Index (ASX:XSJ) has returned 1.40% annually over the past five years – a modest figure compared to the broader All ords index, which returned 8.62% in the same period. But what it lacks in high growth, it often compensates for in reliability, particularly during economic slowdowns.
One major reason investors look to Woolworths is its consistent dividend history. Over the past five years, the group has averaged a dividend yield of 2.92%, with its current yield sitting around 4.43%. This is notably above its 5-year average, pointing to either growing dividends or a dip in share price – in this case, the former seems to be true. The company’s last dividend payment exceeded its three-year average, reinforcing its solid position among ASX dividend stocks.
Another attractive trait is the defensive nature of the consumer staples sector. Unlike more cyclical industries, companies like Woolworths are less affected by macroeconomic swings, as consumers continue to spend on essentials even during downturns. This translates to more consistent earnings and, by extension, more stable share performance. Lower volatility also makes companies in this space an appealing addition to diversified portfolios.
With rising dividends, a dominant market position, and a business model built around everyday essentials, Woolworths (ASX:WOW) continues to demonstrate why it's a key player not just within consumer staples, but also across the broader ALL Ordinaries index.
