3 High yield ASX Dividend stocks for 2024
As 2023 comes to a close, analysts and investors are excited about what could be the next game changer for the market in New Year 2024. The current year has well demonstrated its significant strength, and it looks like the trend might continue into the next year. Despite the hope of economic recovery and optimism highlighted by the Central Bank of Australia, investor sentiment can change abruptly because of things like global tensions, market volatility, unexpected economic news, or events.
Regardless of how optimistic or pessimistic the market appears, investors consistently incline towards safe stocks that have a prevailing capability of stabilizing, especially during tough market situations.
Among these safe investment options, dividend stocks belong to companies with a proven track record of consistent dividend payments. These high-yield ASX dividend-paying stocks might belong to various sectors, such as utilities, consumer goods, or healthcare. Furthermore, historical track records of such quality companies show their outperformance compared to various other asset classes across different market cycles.
There are various reasons to own ASX dividend stocks due to their stability and high yield features. Let’s look at some ASX dividend stocks that have consistently increased their payout over the years. These are as follows:
Yancoal Australia Limited (ASX: YAL)
Annual dividend yield = 21.65% (as of YTD 11 December 2023).
Yancoal Australia Limited is a leading coal producer concentrating on developing and operating coal projects in Australia.
During the September quarter of 2023, the average realized coal price was $197 per ton and $247 per ton for the first nine months of 2023. By the end of the quarter, coal market conditions improved as seasonal factors and supply disruptions tipped the supply-demand balance in favor of coal sellers.
The company paid dividends to shareholders again in September and has now distributed approximately $2.30 per share over the past two years, with $1.60 per share of this fully franked.
Woodside Energy Group Ltd (ASX: WDS)
Annual dividend yield = 11.22% (as of YTD 11 December 2023).
The company reported on 6 December 2023, signing a sales and purchase agreement with Mexico Pacific Limited to purchase 1.3 Mtpa, equivalent to approximately 18 cargoes per year, of liquefied natural gas for 20 years. The SPA gives greater scalability and portfolio flexibility to serve clients more smoothly.
The sale of a 10% non-operating participating interest in the Scarborough Joint Venture to LNG Japan represents a strategic move for Woodside Energy Group Ltd. (WDS). Beyond the immediate financial gain of US$500 million and a total consideration of approximately US$880 million upon completion, this transaction allows WDS to reduce its financial exposure and risk associated with the Scarborough project.
There is speculation rumored on the air that Australia's Woodside Energy and Santos initiated a close discussion, reported on the news as of 7 December 2023. They had preliminary talks to create an A$80 billion ($52 billion) global oil and gas giant as consolidation among international energy firms intensified.
If the deal gets materialized that would create the LNG producer in Australia, as the second largest exporter of the super-chilled fuel that will be expected to see decades of growth to meet Asia's energy transition needs.
Whitehaven Coal Ltd. (ASX: WHC)
Annual dividend yield = 10.27% (as of YTD 11 December 2023).
Whitehaven Coal Ltd. is a producer of premium-quality coal focused on the development and operation of coal mines in Australia.
The revenues grew by 23%, from $4.92 billion in 2022 to $6.06 billion in 2023.
The profits increased by 36%, from $1.95 billion in 2022 to $2.66 billion in 2023. The EPS also rose from 197.6 cents to 307.7 cents between the respective periods.
The total assets and total liabilities reported at the end of the financial year stood at $7.51 billion and $2.25 billion, respectively, resulting in a debt-to-asset ratio of 0.29.
The company had final cash balances of $2.77 billion as of June 30 June 2023, up 128% from $1.21 billion at the end of the same period last year.
*All Data has been sourced from Company announcements and Refinitiv, Thomson Reuters
Frequently Asked Questions (F.A.Q)
Is it better to rely on dividend income or capital gains?
The dividend yield, besides capital gain, empowers the net-gain growth of investments. Most importantly, investment should grow at a rate higher than the inflation rate. Well-founded companies with robust earnings pay good dividends and simultaneously provide a better return on equity. Small companies sometimes perform well during rallies, providing a huge gain on share price appreciation.
Name the best dividend stocks to own?
Yancoal Australia Limited has an annual dividend yield of 21.65% (as of YTD 11 December 2023). Zimplats Holdings Limited has an annual dividend yield of 13.10% (as of YTD 11 December 2023). Woodside Energy Group Limited also has a very good track record of strong dividend growth, with an annual dividend yield of 11.22% (as of YTD 11 December 2023).
What is the payout ratio?
It is basically a key financial metric used to determine the sustainability of a company’s dividend policy. It is the percentage of dividends that is paid to shareholders with respect to the total net income of a company. Well, fundamentally, companies maintain a good dividend policy year over year.
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