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- Metals and Mining
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- ASX:IGO
3 High Yield Dividend Stocks On ASX Offering Up To 8.4%
Reviewed by Simply Wall St
The Australian market has shown robust growth, advancing 8.2% over the past year with earnings projected to increase by 14% annually. In this thriving environment, high-yield dividend stocks can be particularly appealing for investors looking for both income and potential capital appreciation.
Top 10 Dividend Stocks In Australia
Name | Dividend Yield | Dividend Rating |
Lindsay Australia (ASX:LAU) | 6.63% | ★★★★★☆ |
Nick Scali (ASX:NCK) | 5.08% | ★★★★★☆ |
Fiducian Group (ASX:FID) | 4.03% | ★★★★★☆ |
Centuria Capital Group (ASX:CNI) | 6.74% | ★★★★★☆ |
Charter Hall Group (ASX:CHC) | 3.60% | ★★★★★☆ |
Eagers Automotive (ASX:APE) | 7.35% | ★★★★★☆ |
Premier Investments (ASX:PMV) | 4.66% | ★★★★★☆ |
Fortescue (ASX:FMG) | 8.26% | ★★★★★☆ |
Diversified United Investment (ASX:DUI) | 3.16% | ★★★★★☆ |
Ricegrowers (ASX:SGLLV) | 7.63% | ★★★★☆☆ |
Click here to see the full list of 27 stocks from our Top ASX Dividend Stocks screener.
Let's dive into some prime choices out of from the screener.
IGO (ASX:IGO)
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: IGO Limited is an Australian exploration and mining company specializing in metals crucial for clean energy, with a market capitalization of approximately A$5.33 billion.
Operations: IGO Limited generates revenue primarily through its Nova Operation and Forrestania Operation, which together brought in A$903.40 million.
Dividend Yield: 7.8%
IGO offers a high dividend yield of 7.8%, placing it in the top 25% of Australian dividend payers. However, its sustainability is questionable with a payout ratio of 185%, indicating dividends are not well covered by earnings. While earnings are expected to grow by 23.05% annually, recent financial results have been impacted by significant one-off items, and profit margins have declined from last year's 80% to 24.5%. Cash flows cover dividends better than earnings, with a cash payout ratio at 39.7%. Despite past increases in dividends, payments have shown volatility and unreliability over the last decade.
- Take a closer look at IGO's potential here in our dividend report.
- In light of our recent valuation report, it seems possible that IGO is trading behind its estimated value.
Macquarie Group (ASX:MQG)
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: Macquarie Group Limited operates as a diversified financial services provider across regions including Australia, the Americas, Europe, the Middle East, Africa, and Asia Pacific, with a market capitalization of approximately A$70.28 billion.
Operations: Macquarie Group Limited generates revenue through five primary segments: Corporate (A$0.99 billion), Macquarie Capital (A$2.61 billion), Macquarie Asset Management (A$3.75 billion), Banking and Financial Services (A$3.21 billion), and Commodities and Global Markets (A$6.32 billion).
Dividend Yield: 3.3%
Macquarie Group's dividend track record is unstable, with a history of volatility in the past 10 years. Despite this, dividends are currently covered by earnings with a payout ratio of 69.8%, and forecasts suggest similar coverage over the next three years. However, Macquarie's dividend yield at 3.32% falls below the top tier in Australia's market, where leading payers offer around 6.46%. Additionally, while earnings are expected to grow by approximately 8.98% annually, recent financial results show a decline from A$5.18 billion to A$3.52 billion year-over-year, indicating potential challenges ahead in sustaining and growing dividends effectively.
- Click here to discover the nuances of Macquarie Group with our detailed analytical dividend report.
- The valuation report we've compiled suggests that Macquarie Group's current price could be quite moderate.
New Hope (ASX:NHC)
Simply Wall St Dividend Rating: ★★★★☆☆
Overview: New Hope Corporation Limited, with a market cap of A$4.27 billion, is engaged in the exploration, development, production, and processing of coal and oil and gas properties.
Operations: New Hope Corporation Limited generates A$1.88 billion from its Coal Mining NSW segment and A$48.15 million from its Coal Mining QLD segment, which includes Treasury and Investments.
Dividend Yield: 8.5%
New Hope Corporation's dividend yield stands at a robust 8.5%, positioning it well above the Australian market average of 6.46%. However, its dividends have demonstrated volatility and unreliability over the past decade, with significant annual fluctuations exceeding 20%. While the payout ratio is relatively low at 48.4%, suggesting earnings coverage, both earnings and cash flows raise concerns; earnings are projected to decline by about 7.5% annually over the next three years, and a high cash payout ratio of 90.2% indicates that current dividends are not sustainably covered by free cash flow. Recent financials reveal a sharp drop in net income from A$668.61 million to A$251.67 million year-over-year, further complicating its dividend sustainability outlook.
- Navigate through the intricacies of New Hope with our comprehensive dividend report here.
- Insights from our recent valuation report point to the potential undervaluation of New Hope shares in the market.
Turning Ideas Into Actions
- Reveal the 27 hidden gems among our Top ASX Dividend Stocks screener with a single click here.
- Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
- Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.
Searching for a Fresh Perspective?
- 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.
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About ASX:IGO
IGO
Operates as an exploration and mining company that engages in discovering, developing, and operating assets focused on metals to enable clean energy in Australia.
Flawless balance sheet, good value and pays a dividend.