As investors seek stable returns amid market volatility, dividend stocks have emerged as a popular choice. In Australia, the ASX is home to a plethora of companies that offer attractive dividend yields, providing a steady stream of income to shareholders. In this blog, we will shine a light on the top dividend stocks to watch on the ASX in 2023. From established blue-chip companies to up-and-coming firms, we will explore the best opportunities for income-seeking investors to consider. Whether you are a seasoned investor or a newcomer to the market, this article will provide insights into the best dividend stocks that ASX has to offer.
What are Dividend Stocks?
Dividend stocks are companies that pay out dividends on a regular basis. Dividend stocks are often well-established companies with a record of returning earnings to shareholders. A dividend is a monetary reward given to shareholders by publicly traded companies. Dividends are paid out of the company’s net profits.
Such awards can take the shape of cash, cash equivalent, shares, and so on, and are often paid from the remaining portion of profit after essential expenses have been fulfilled. Companies, on the other hand, may choose to keep their accrued profits and reinvest them in the business or reserve them for future use.
Reasons to Consider Investing in Dividend Stocks
Investing in dividend stocks can be a smart move for several reasons:
Also Read: Top Energy Stocks on ASX [2023]
Top 2023 Dividend Paying Stocks on ASX
| Company Name | Price | Market Capitalisation |
| BHP Group Ltd (BHP) | 48.34 AUD | 24.49TCr |
| Commonwealth Bank of Australia (CBA) | 99.20 AUD | 16.75TCr |
| Wesfarmers Limited (WES) | 49.22 AUD | 5.58TCr |
| Telstra Corporation Ltd (TLS) | 4.15 AUD | 4.80TCr |
| Rio Tinto Limited (RIO) | 125.51 AUD | 18.04TCr |
| Fortescue Metals Group Limited (FMG) | 22.89 AUD | 7.05TCr |
| CSL Limited (CSL) | 295.70 AUD | 14.26TCr |
| National Australia Bank Ltd (NAB) | 30.06 AUD | 9.44TCr |
| Harvey Norman Holdings Ltd (HVN) | 4.18 AUD | 520.83 Cr |
| Woolworths Group Ltd (WOW) | 37.45 AUD | 4.56TCr |
Let’s look at each of these companies in detail:
1> BHP Group Ltd (BHP)
BHP Group Ltd is a multinational mining and metals company based in Australia. It is one of the world’s largest diversified resources companies, with operations in more than 90 locations around the globe.
For investors looking for good dividend stocks, BHP Group Limited is definitely a good option. The company has a long history of paying dividends to its shareholders and has consistently ranked among the highest dividend-paying companies in the mining industry. The company’s strong balance sheet and cash-generating capabilities make it well-positioned to continue paying dividends to shareholders, even during times of market turbulence.
BHP Group Ltd is one of the 2023 Top ASX Dividend stocks that offer investors a compelling combination of income and stability. With its strong financial position and diverse operations, the company is well-equipped to weather any challenges that may arise in the resources industry, making it a solid long-term investment option for income-seeking investors.
2> Commonwealth Bank of Australia (CBA)
Commonwealth Bank of Australia (CBA) is one of the largest banks in Australia. It provides consumers and organizations with a broad range of financial services including corporate banking, institutional banking, and wealth management.
CBA has a great track record of paying dividends to its stockholders. CBA is projected to continue paying out large dividends to its stockholders in 2023. It is frequently cited among the best dividend stocks on the ASX as of early 2023, among other large banks like as Westpac and ANZ. While there are always risks involved with investing in any stock, several analysts feel CBA is well-positioned to continue providing strong returns to its shareholders.
3> Wesfarmers Limited (WES)
Wesfarmers Limited is a diversified conglomerate with operations across a range of industries including retail, chemicals, energy, and industrial businesses. Wesfarmers has a long history of delivering dividends to its shareholders, with a solid dividend yield that has consistently outperformed the Australian stock market’s average yield.
The major goal of Wesfarmers is to provide sufficient returns to shareholders through financial discipline and strong management of a diverse portfolio of businesses.
Looking ahead to 2023, Wesfarmers is often mentioned among the best dividend stocks on the ASX. The company has a strong balance sheet and generates consistent cash flows from its diversified operations, which supports its ability to pay dividends to shareholders.
4> Telstra Corporation Ltd (TLS)
Telstra Group Limited is a telecommunications company based in Australia that builds and operates telecommunications networks as well as marketing voice, mobile, internet access, pay television, and other goods and services. It is a member of the S&P/ASX 20 company and Australia’s largest telecommunications company by market share. Telstra is Australia’s largest wireless carrier, with 18.8 million subscribers as of 2020.
Telstra has a long history in Australia, having begun as the Postmaster-Department General’s with Australia Post following federation in 1901. Telstra has recently focused on varied products and developing technology after shifting from a state-owned company to a completely privatised company.
Overall, for investors seeking dividend income and potential growth in 2023, Telstra is definitely a stock to consider. Its strong dividend history, solid financial performance, and investments in new technologies make it a strong contender among the best dividend stocks on the ASX.
5> Rio Tinto Limited (RIO)
Rio Tinto Group is the world’s second-largest metals and mining company and an Anglo-Australian multinational corporation. The company was established in 1873. Rio Tinto Ltd is a mining corporation. The company produces iron ore for steel, aluminum for automobiles and phones, and copper for wind turbines. Rio Tinto serves consumers all around the world.
However, because of the impact of the COVID-19 pandemic on its operations, the company was obliged to lower its interim dividend in 2020. Rio Tinto lowered its dividend for the first time in over 20 years.
Overall, Rio Tinto is a very good stock for investors seeking good income in 2023. While the company cut its dividend in 2020, it still has a strong dividend history and has indicated that it remains committed to maintaining a strong dividend policy. However, investors should be aware of the risks associated with investing in the mining industry and should consider these risks when making investment decisions.
6> Fortescue Metals Group Limited (FMG)
Fortescue Metals Group Limited is an iron ore company based in Australia. Fortescue is the world’s fourth-largest iron ore producer as of 2017. The company owns more than 87,000 km2 of land in Western Australia’s Pilbara area, making it the state’s largest tenement holder, larger than both BHP and Rio Tinto.
In terms of dividend stocks on the ASX, Fortescue Metals Group Limited is known for providing high dividends to its shareholders. For the last five years, Fortescue Metals Group has increased earnings per share by 30% every year. Although returning a lot of capital to shareholders, the company is still growing, which is a great mix for a dividend stock.
Overall, Fortescue Metals Group Limited is considered to be a top dividend stock on the ASX, thanks to its history of providing high dividends and its continued focus on delivering value to its shareholders.
7> CSL Limited (CSL)
CSL Limited is a multinational specialty biotechnology firm based in Australia that conducts research, develops, manufactures, and markets products to treat and prevent serious human medical illnesses. CSL’s product lines include blood plasma derivatives, vaccines, antivenom, and cell culture reagents for use in medical and genetic research and production.
CSL began in 1916 as the Commonwealth Serum Laboratories, an Australian government agency devoted to vaccine production. CSL Ltd is regarded as one of the best dividend-paying stocks on ASX.
While CSL Limited’s dividend yield may not be as high as some other stocks on the ASX, the company’s reputation for stable and reliable dividend payments has made it a popular choice among income-seeking investors. Additionally, the company’s strong financial performance and long-term growth prospects have helped to support its share price and make it a popular choice among investors more broadly.
8> National Australia Bank Ltd (NAB)
In terms of market capitalisation, earnings, and customers, National Australia Bank is one of Australia’s four largest financial organisations. In 2019, NAB was ranked the 21st-largest bank in the world by market capitalisation and the 52nd largest bank in the world by total assets.
NAB has an “AA-” long-term issuer rating by Standard & Poor’s. NAB’s dividend policy is aimed at providing stable and predictable dividends to its shareholders, and the company has a target payout ratio of 60% to 80% of its earnings. While the COVID-19 pandemic has had some impact on the banking industry, NAB has continued to pay dividends throughout the crisis, although it did reduce its dividend payout in 2020.
Overall, NAB is considered to be one of the top dividend stocks on the ASX due to its history of consistent dividend payments and its relatively high dividend yield compared to other stocks on the index.
9> Harvey Norman Holdings Ltd (HVN)
Harvey Norman is a prominent multi-national retailer founded in Australia that sells furniture, bedding, computers, communications, and consumer electronics. It mostly operates as a franchise, with ASX-listed Harvey Norman Holdings Limited owning the primary brand and all company-operated stores. As of 2022, there are 304 company-owned and franchised stores throughout Australia, New Zealand, Europe, and South-East Asia that operate under the Harvey Norman, Domayne, and Joyce Mayne brands in Australia, and the Harvey Norman brand overseas.
Harvey Norman Holdings’ unique dividend policy has made it a popular choice among income-seeking investors wanting a consistent stream of cash flow from their investments. Dividend payments have been supported by the company’s consistent financial performance and robust cash flows.
10> Woolworths Group Ltd (WOW)
Woolworths Group Limited is an Australian retail company headquartered in Bella Vista, Sydney, with operations spread across Australia and New Zealand. It is Australia’s largest firm by revenue and New Zealand’s second-largest.
Woolworths presently owns Woolworths Supermarkets, Everyday Rewards customer loyalty programme, and discount department store Big W in Australia, as well as Countdown, SuperValue, and FreshChoice supermarkets in New Zealand.
In terms of dividend stocks on the ASX, Woolworths Group is expected to be a top performer in 2023. Woolworths Group’s financial performance has been robust in recent years, supported by ongoing demand for vital goods and services, as well as the company’s investment in its online capabilities and supply chain. This has aided the company’s share price and dividend payments, and it is likely to generate growth in 2023 and beyond.
FAQs:
1> Is it good to buy dividend stocks?
Whether or not it is good to buy dividend stocks depends on an individual’s investment goals and risk tolerance. Dividend stocks can be a good investment option for those seeking regular income, as they provide a predictable source of cash flow in the form of dividend payments.
2> Are dividends taxable?
Yes, dividends are generally taxable. In most countries, including the United States and Australia, dividend income is considered taxable income and must be reported on an individual’s tax return.
3> Can I get a dividend every month?
It is possible to receive dividend payments every month in Australia, but it is relatively uncommon for companies listed on the Australian Securities Exchange (ASX) to pay dividends on a monthly basis.
4> How to invest in dividend stocks
A Demat account and a trading account are required to purchase dividend-paying stocks. You can open an account with a stock broker and then purchase dividend-paying stocks directly from the market.