Five dividend stocks with yields above 10%

Summary

  • Interest rates in Australia remain at the historic low of 0.1%, making dividend income more lucrative.
  • Base Resources is a AU$341.6 million ASX-listed mineral sands producer, trading at 22.4% dividend yield.
  • AGL Energy’s share price is trading at a healthy dividend yield of 11.45%.

For some investors, dividends are a crucial factor to consider while investing. Consistent payout of dividends by companies also denotes their financial health and focus on the wealth creation for their shareholders.

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Interest rates in Australia remain at the historic low of 0.1% to support the economic recovery, making fixed income securities less lucrative. A robust business, which is paying consistent dividends and at the same time, trading at a high dividend yield, could be a better alternative for investors seeking a regular cash flow. With that being said, here is a list of five ASX-listed stocks trading at a dividend yield of above 10%.

Read More: Eyeing dividend stocks to invest? Basic facts to keep in mind

  1. Base Resources Limited (ASX:BSE)

Base Resources is a AU$341.6 million ASX-listed mineral sands producer, which declared a dividend of 3 cents per share (cps) in February for 1H FY21. In Q3 FY21, the company’s FY21 production guidance range for ilmenite and zircon has been increased due to higher-than-forecast ilmenite and zircon content in the mineral separation plant feed.

The BSE share price is trading 3.45% up, at AU$0.3 with a massive dividend yield of 22.4%.

  1. Southern Cross Group Limited (ASX:SXL)

Southern Cross is one of Australia’s leading media companies, which has declared NPAT of AU$32.5 million in 1H FY21, an increase of 59.3% from AU$20.4 million a year ago. The net debt has also been reduced by 49.5% to AU$66.4 million in 1H FY21. On the back of strong financial numbers, the company could announce a decent dividend as part of FY21 full year results.

Currently, the SXL share price is trading at a dividend yield of 14.6%, quoting at AU$1.865.

  1. Fortescue Metals Group Limited (ASX:FMG)

This large-cap ASX miner is quoting at a dividend yield of 10.82%. The company has recently delivered iron ore shipments of 42.3 million tonnes (mt), in line with record third quarter shipments last year. Rising commodity prices, which in turn resulted  in supernormal profits, are expected to boost the dividend payout in FY21 final results.

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The FMG share price is trading 2.2% up, at AU$23.34.

  1. Perenti Global Limited (ASX:PRN)

A AU$464 million mining services group, Perenti Global has successfully exited from loss-making Yanfolila contract and concluded the Boungou asset sale, having now released circa AU$87 million of cash from these projects. Since 31 December 2020, the company has announced over AU$700 million of contract awards.

The PRN share price is trading at AU$0.675 and offering a dividend yield of 10.6%.

  1. AGL Energy (ASX:AGL)

AGL Energy’s share price is trading at a healthy dividend yield of 11.45%. This AU$5 billion energy player had declared a dividend of 41 cents per share (cps), including 10 cps of special dividend on 15 March 2021. The company expects underlying NPAT for FY21 to be in the range of AU$500 and AU$580 million, consistent with the update it provided in December 2020.

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The AGL share price is trading at AU$8.25, up by 2.7%.

Read More: AGL Energy (ASX:AGL) To Recognise Charges in H1; Here’s why

However, one must note that an excessively high dividend yield is not always as good as it sounds. A high dividend yield also might be the result of one time special dividend which is highly dependent on a company’s earnings and might not be sustainable. In other cases, it might be due to a sharp fall in the share price which might question the health of the company.

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