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Highlights
- ASX dividend stocks ANZ Group Holdings, Steadfast Group, and Smartgroup attract interest amid market shifts.
- ANZ Group offers a balanced dividend yield and room for growth, while Steadfast focuses on stability.
- Smartgroup’s high yield raises sustainability questions, but its valuation remains appealing.
With the ASX200 experiencing recent declines, many are shifting focus toward dividend stocks that offer steady income, even during periods of market fluctuation. As sectors like Materials and Energy face pressure from declining commodity prices and underwhelming Chinese economic support measures, dividend stocks such as ANZ Group Holdings, Steadfast Group, and Smartgroup stand out for their potential to deliver dependable returns in the current economic landscape.
Here’s an overview of these dividend stocks that could offer consistent income.
ANZ Group Holdings (ASX:ANZ)
ANZ Group Holdings is a major financial institution with a broad range of banking services for retail and commercial clients both in Australia and internationally. With a market cap of A$95.52 billion, ANZ generates substantial revenue from segments like New Zealand, Institutional, Australia Retail, and Commercial operations.
Currently, ANZ Group offers a dividend yield of 5.2%. However, its dividend history has shown some fluctuations over the past decade. Recently, its final dividend decreased to A$0.83 per share, though it remains adequately covered by earnings with a payout ratio of 76.2%. This is projected to improve to 73.1% in the coming years, suggesting a sustainable yield alongside potential capital gains as the stock trades below its estimated fair value.
Steadfast Group (ASX:SDF)
Steadfast Group operates as a general insurance brokerage with a strong presence in Australasia, Asia, and Europe. With a market capitalization of A$6.26 billion, Steadfast derives most of its revenue from the Insurance Intermediary segment, followed by Premium Funding.
Steadfast Group offers a dividend yield of 3%, supported by steady earnings growth. Although its dividend history has experienced some volatility, recent earnings growth of 34% annually over the past five years supports its dividend coverage. Currently, the payout ratio stands at 80.7% of earnings and 65.6% of cash flows, maintaining a good balance. The company recently announced a final franked dividend of A$0.1035 per share for the year ending in June 2024. Trading at a discount to fair value, Steadfast provides income stability with room for potential appreciation.
Smartgroup Corporation (ASX:SIQ)
Smartgroup specializes in employee management services across Australia, with a market cap of A$1.02 billion. It generates most of its revenue from its Outsourced Administration segment, alongside contributions from Software, Distribution, and Vehicle Services.
Offering a high dividend yield of 6.5%, Smartgroup recently declared a cash dividend of A$0.175 per share. However, this high yield comes with challenges, as the dividend history has been somewhat inconsistent. The company’s payout ratio stands at 64.6% of earnings, though a cash payout ratio of 131.2% signals concerns over long-term sustainability. Despite this, Smartgroup’s valuation appears attractive as it trades below fair estimates, appealing to income-seekers.
These ASX dividend stocks offer a range of yields and stability levels, making them notable options within the current market landscape.
