Are These 2 ASX Dividend Stocks Worth Buying Despite Higher Rates?

The Australian interest rate environment is impacting the infrastructure and REIT space.

Currently, the RBA cash rate is 4.35% and is expected to further increase in the September meeting. The RBA has been hiking interest rates due to high headline CPI of 3.5% in July 2026, which is above the target inflation range of 2% to 3%.

The rise in interest rates will increase borrowing costs for infrastructure and REIT-based companies, putting pressure on property valuations and earnings.

Despite that, the following stocks have high yields and strong fundamentals.

APA Group (ASX: APA)

APA Group (ASX: APA) is one of the top-performing ASX stocks, having generated a 1-year return of 19.33%. It is currently trading at a market capitalisation of $14.34 billion and has a current annual partly franked dividend yield of 5.37%.

APA announced its FY26 results on 20 August 2026 for the period ended June 2026. Underlying EBITDA grew 8.3% year over year to approximately $2.2 billion, above the midpoint of guidance.

This led to an increase in the underlying EBITDA margin of 370 basis points year over year to 77.9%.

APA Group recorded capital expenditure of $845 million, of which $546 million went towards growth capex, $89 million towards foundational capex and $210 million towards stay-in-business expenditure.

The company reported free cash flow of $1.1 billion, an increase of 3.2% year over year. APA also made a distribution per security of 58 cents per share.

APA is expected to continue the same growth momentum in FY27, with EBITDA guidance of $2.26 billion–$2.34 billion. At the midpoint of $2.3 billion, this represents an expected increase of 5.4% on FY26.

FY27 expected DPS is 59 cents.

Transurban Group (ASX: TCL)

Transurban Group (ASX: TCL) is one of the infrastructure-based ASX stocks. It is currently trading at a market capitalisation of $41.19 billion and has a current annual unfranked dividend yield of 5.22%.

TCL operates in a high-entry-barrier business with a huge capital investment.

Transurban announced its August 2026 traffic performance on 17 September 2026, with overall group average daily traffic (ADT) growing by 3.4% compared with the prior corresponding period.

The company also announced on 20 August 2026 that the Drive TN Consortium had been selected for Tennessee’s I-24 Choice Lanes project in Nashville.

DriveTN includes three companies: Ferrovial, Transurban and Tikehau Star Infra. The consortium will have to design, build, finance, operate and maintain the new I-24 Choice Lanes.

The project has an estimated construction value of US$9.2 billion and a total concession value of approximately US$24.8 billion.

TCL announced its FY26 results on 13 August 2026 for the period ended June 2026. Proportional total revenue increased by 6.5% year over year to $4 billion, while proportional EBITDA grew by 16.2% year over year to $3.1 billion.

FY26 group traffic rose by 2.2% year over year, while July 2026 traffic grew by 4% year over year.

TCL reported free cash coverage of 98.1% and free cash of $2.1 billion, up 5.1% year over year.

The company had gearing of 37.4%, with a weighted average cost of debt of 4.8%.

The distribution increased by 6.2% year over year to 69 cents per share, which was 98% covered by free cash.

Transurban Group has FY27 distribution guidance of 72 cents per share, representing a 4.3% year-over-year increase. Free cash coverage is expected to be slightly below the target range of 95%–105% for FY27.

Conclusion

The following infrastructure and REIT stocks have earning potential supported by high dividend yields and their business models, despite the interest rate hike.

(Source: Company Announcements)