Which are the top dividend stocks in Australia?

Summary

  • Companies pay out dividends to their shareholders, either in the form of additional stock or cash, as an incentive for investing in the Company.
  • Dividend-paying stocks can provide sustainable and sometimes higher dividend yields with the potential of dividend growth.
  • Some of the top dividend payers listed on the ASX include AGL Energy, Aurizon Holdings, Fortescue Metals, Origin Energy and APA Group.

Dividend stocks are well-established firms having a track record of paying out a portion of earnings back to the shareholders in the form of dividends.

Dividends are paid either in the form of additional stock or simply cash. Cash dividends are given per the number of shares an individual owns.

Dividend-paying stocks can provide sustainable and sometimes often higher dividend yields with the prospect of dividend growth and capital gain.  A dividend yield strategy can help market participants find potentially undervalued stocks with less downside risk, given the dividend is secure.

ALSO READ: Why do investors look for dividend stocks?

Source: Copyright © 2021 Kalkine Media

However, not all dividends are created equal, and many companies have either eliminated or slashed their dividends since the COVID-19 pandemic began. Therefore, it is imperative for market participants to keep an eye on how dedicated the Company’s management has been to make sure that dividends are rewarded and whether the dividend has increased, remained the same or been slashed.

ALSO READ: 5 ASX stocks with dividend yield over 8%

With this backdrop, let us discuss top 5 dividend-paying stocks in Australia-

AGL Energy Limited (ASX:AGL)

AGL operates Australia’s most extensive private electricity generation portfolio and supplies around 4.5 million energy and telecommunications services. The AU$5.73 billion Company is committed to becoming a prominent multi-product retailer, providing energy and other essential services in a simple, fair, and transparent manner.

AGL is a consistent dividend payer, and since 2018, the Company reported a constant increase in its annual dividend yield. AGL Energy paid a dividend amounting to AU$0.410 on 26 March 2021 for 1H FY21. The energy player has an annual dividend yield of 9.98% as of 23 June 2021.

Source: Copyright © 2021 Kalkine Media, Data Source: ASX update

Aurizon Holdings Limited (ASX:AZJ)

ASX-100 company Aurizon is the biggest rail freight operator across Australia. The Company transports over 250 million tonnes of Australian commodities every year and connects miners, industry, and primary manufacturers with global and local markets.

Aurizon has consistently paid dividends to its shareholders since 2015. In the first half of FY21, the Company paid an interim dividend of AU$0.144 on 31 March 2021. AZJ has consistently increased its dividends since March 2019. Its annual dividend yield stands at 7.51% (As of 23 June).

Source: Copyright © 2021 Kalkine Media, Data Source: ASX update

Fortescue Metals Group Limited (ASX:FMG)

Australian iron ore company Fortescue Metals Group is a frontrunner in the iron ore sector. The AU$68.90 billion Company is engaged in the exploration, production, processing as well as sale of iron ore. The mining behemoth has an annual dividend yield of 11.03% as of 23 June 2021.

Fortescue has been providing sustainable dividends to its shareholders since 2015 and has constantly increased dividends after 2020. The Company paid its interim dividend amount AU$1.470 for 1H FY21 on 24 March 2021.

Source: Copyright © 2021 Kalkine Media, Data Source: ASX update

Origin Energy Ltd (ASX:ORG)

Origin Energy is an AU$8.38 billion company that is a leading provider of energy to homes and businesses in Australia. The Company has a legacy in energy exploration, manufacturing, power generation as well as retailing.

On 18 February 2021, the energy player disclosed an interim dividend (unfranked) for FY2021 of 12.5 cents per share. The Company paid a dividend on 26 March 2021. As of 23 June 2021, the annual dividend yield of the Company is 4.72%.

Source: Copyright © 2021 Kalkine Media, Data Source: ASX update

APA Group (ASX:APA)

ASX-listed largest owners and operators of renewable power generation assets APA Group is a leading Australian energy infrastructure business. APA holds ownership interests in several energy infrastructure companies, including Energy Infrastructure Investments, GDI Allgas Gas Networks, SEA Gas Pipeline, and SEA Gas (Mortlake) Partnership.

The Company paid its interim dividend amounting to AU$0.240 for FY21 on 17 March 2021. APA has an annual dividend yield of 5.44% as of 23 June 2021.

Source: Copyright © 2021 Kalkine Media, Data Source: ASX update

ALSO READ: Which one is the best dividend ETF on the ASX?


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