Top ASX Dividend Stocks To Watch In May 2025

As the ASX200 edges up by 0.22% to 8,297 points, investors are closely monitoring sector performances with IT leading the charge and Real Estate lagging behind. In this dynamic market environment, identifying strong dividend stocks can be crucial for investors seeking steady income streams amidst fluctuating sector performances.

Top 10 Dividend Stocks In Australia

Click here to see the full list of 31 stocks from our Top ASX Dividend Stocks screener.

Here we highlight a subset of our preferred stocks from the screener.

Lindsay Australia (ASX:LAU)

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

Overview: Lindsay Australia Limited offers integrated transport, logistics, and rural supply services to the food processing, food services, fresh produce, and horticulture sectors in Australia with a market cap of A$223.61 million.

Operations: Lindsay Australia Limited generates its revenue from several segments, including Transport (A$573.35 million), Rural (A$160.92 million), and Hunters (A$100.09 million).

Dividend Yield: 7.0%

Lindsay Australia's dividend payments, though historically volatile, are currently covered by earnings with a payout ratio of 67.1% and well-supported by cash flows at 21.8%. The recent dividend increase to A$0.023 per share reflects its position in the top quartile of Australian dividend payers. Despite lower profit margins and fluctuating dividends over the past decade, the stock trades significantly below estimated fair value, suggesting potential for capital appreciation alongside income generation.

• Delve into the full analysis dividend report here for a deeper understanding of Lindsay Australia.
• Our valuation report unveils the possibility Lindsay Australia's shares may be trading at a discount.

Smartgroup (ASX:SIQ)

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

Overview: Smartgroup Corporation Ltd, with a market cap of A$997.56 million, provides employee management services in Australia.

Operations: Smartgroup Corporation Ltd generates revenue through its Vehicle Services, contributing A$21.87 million, and Outsourced Administration, which accounts for A$287.87 million.

Dividend Yield: 6.7%

Smartgroup's dividend yield of 6.68% places it in the top quartile of Australian payers, yet its dividends are not well covered by free cash flows due to a high cash payout ratio of 134.8%. While earnings cover dividends with a reasonable payout ratio of 64.4%, past payments have been volatile and unreliable, despite recent increases. The stock trades at a significant discount to estimated fair value, offering potential for capital appreciation alongside income generation.

• Get an in-depth perspective on Smartgroup's performance by reading our dividend report here.
• Our valuation report here indicates Smartgroup may be undervalued.

Southern Cross Electrical Engineering (ASX:SXE)

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

Overview: Southern Cross Electrical Engineering Limited offers electrical, instrumentation, communications, security, and maintenance services to the resources, commercial, and infrastructure sectors in Australia with a market cap of A$485.19 million.

Operations: Southern Cross Electrical Engineering Limited generates revenue primarily from the provision of electrical services, amounting to A$693.73 million.

Dividend Yield: 3.3%

Southern Cross Electrical Engineering's dividend yield of 3.27% is modest compared to top Australian dividend payers, and its history shows volatility despite recent increases. The company's dividends are well covered by both earnings, with a payout ratio of 69.4%, and cash flows, at a cash payout ratio of 21.5%. Recent earnings growth and trading below estimated fair value suggest potential for capital appreciation, though the unstable dividend track record remains a concern for income-focused investors.

• Unlock comprehensive insights into our analysis of Southern Cross Electrical Engineering stock in this dividend report.
• The valuation report we've compiled suggests that Southern Cross Electrical Engineering's current price could be quite moderate.

Next Steps

• Explore the 31 names from our Top ASX Dividend Stocks screener here.
• 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.
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Seeking Other Investments?

• 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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