Exploring ASX Dividend Stocks In May 2024

Over the last seven days, the Australian market has experienced a 1.0% decline, though it maintains an overall growth of 8.4% over the past year with earnings expected to grow by 14% annually. In this context, identifying dividend stocks that offer stability and potential for consistent returns can be particularly appealing to investors looking for reliable income streams in fluctuating markets.

Top 10 Dividend Stocks In Australia

Click here to see the full list of 29 stocks from our Top ASX Dividend Stocks screener.

Let's take a closer look at a couple of our picks from the screened companies.

Eagers Automotive (ASX:APE)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Eagers Automotive Limited is an automotive retail company that owns and operates motor vehicle dealerships in Australia and New Zealand, with a market capitalization of approximately A$2.61 billion.

Operations: Eagers Automotive Limited generates most of its revenue, approximately A$9.85 billion, from car retailing activities.

Dividend Yield: 7.3%

Eagers Automotive exhibits a mixed outlook for dividend investors. While the company's dividend yield of 7.32% ranks well above the market average, its history of dividend payments has been unstable, showing significant volatility over the past decade. Despite this, both earnings and cash flows currently support these dividends with payout ratios at 66.8% and 55.9%, respectively. However, earnings are expected to slightly decline by an average of 0.3% annually over the next three years, which could challenge future dividend sustainability if this trend continues or worsens.

• Click here to discover the nuances of Eagers Automotive with our detailed analytical dividend report.
• Our expertly prepared valuation report Eagers Automotive implies its share price may be lower than expected.

Australian United Investment (ASX:AUI)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Australian United Investment Company Limited, a publicly owned investment manager, operates with a market capitalization of approximately A$1.28 billion.

Operations: Australian United Investment Company Limited generates revenue primarily through its investment activities, totaling A$58.33 million.

Dividend Yield: 3.6%

Australian United Investment (AUI) has seen a decade of stable dividend payments, with an increase over the years. However, its current dividend yield of 3.6% is below the top quartile in Australia's market. The dividends are not fully covered by earnings, given a high payout ratio of 92.4%, and only marginally supported by cash flows at 87.1%. This scenario suggests potential challenges in maintaining or growing dividends without improved earnings coverage.

• Get an in-depth perspective on Australian United Investment's performance by reading our dividend report here.
• The valuation report we've compiled suggests that Australian United Investment's current price could be inflated.

Accent Group (ASX:AX1)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Accent Group Limited operates in the retail, distribution, and franchise of lifestyle footwear, along with apparel and accessories across Australia and New Zealand, boasting a market cap of approximately A$1.03 billion.

Operations: Accent Group Limited generates A$1.40 billion in revenue primarily through its multi-channel retail operations focusing on performance and lifestyle footwear.

Dividend Yield: 7.6%

Accent Group's dividend yield of 7.63% ranks in the top 25% of Australian payers, yet its sustainability is questionable with a payout ratio exceeding earnings at 107.2%. Although dividends are better supported by cash flows with a low cash payout ratio of 39%, historical data reveal inconsistency and volatility in dividend payments over the past decade. Despite this, earnings are expected to grow annually by 11.86%, and analysts predict a potential stock price increase of 24.1%.

• Dive into the specifics of Accent Group here with our thorough dividend report.
• Upon reviewing our latest valuation report, Accent Group's share price might be too pessimistic.

Where To Now?

• Click this link to deep-dive into the 29 companies within our Top ASX Dividend Stocks screener.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com