Top ASX Dividend Stocks: Best Dividend Shares for 2023

Team Veye | 31-Jul-2023 dividend stocks asx

Becoming Wealthier through Dividend Investing

It is common knowledge that though richness is either inherited or through windfall gains, wealth can only be only created by consistent gains.

Time is the essence in identifying productive dividend stocks. And what could be more lucrative than using artificial intelligence to leverage data, in identifying a stock from a turnaround sector, spotted at the right time. It certainly makes prospect of earning passive income through dividends more attractive by navigating thru historical trends.

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The Best Dividend Stocks on the ASX

It is a common myth that stocks with high dividend yield are the best dividend stocks. Several other factors, like consistency, dividend growth and payout ratio are important but not without seeing the bottom line in the balance sheet of the company to assess whether the company itself is on a growth path. Taking into account all such parameters lead to identifying stocks with high potential and capable of beating the markets.

Highest Paying Dividend Stocks on the ASX are

  • Yancoal Australia Ltd. (ASX: YAL)
  • Myer Holdings Ltd. (ASX: MYR)
  • Australian Clinical Labs Ltd. (ASX: ACL)
  • Coronado Global Resources Inc (ASX: CRN)
  • Helia Group Ltd. (ASX: HLI)

What are the Best Dividend Stocks for Investors?

Investors and traders have different approach towards dividend investing. While traders look for short term returns, investors look for stocks that offer a growth in price as well increasing/consistent dividends. Investors prefer a stock giving capital appreciation as well as passive income. Thus, parameters to select a dividend stock for investors are vastly different from that for traders.

Investors, in a bid to generate wealth, usually select stocks that are remunerative and bankable. Their search ends with stocks of quality companies with defensive earnings profiles that are capable to survive the turmoil better than their cyclical and growth-oriented counterparts.

What are the Best Dividend ETFs?

Elstree Hybrid Fund   EHF1
The fund invests in 15-40 hybrids and is aimed at investors who want a higher return than bank term deposits and less yield risk than investing in Australian shares.

Top 5 ASX Dividend Stocks

McMillan Shakespeare Limited (ASX: MMS)

McMillan Shakespeare Limited is an Australia-based provider of salary packaging and novated leasing services besides offering fleet and asset management and consumer and fleet financing. 

Operating through three segments: Group Remuneration Services (GRS), Asset Management (AM) and Retail Financial Services (RFS), it has a track record of strong shareholder returns.

The company has well positioned businesses to capture opportunities amidst changing macro dynamics.
Group Normalised revenue of $314.8m increased 1.0%, Normalised EBITDA of $67.2m increased 5.7%
Interim fully franked dividend of 58.0 cps (1HFY22 Interim Dividend 34.0cps). 10% off-market share buy-back completed

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi Limited is a leading retailer of home entertainment and technology products, based in Australia, with operations spread across three segments: JB Hi-Fi Australia (JB Aust), JB Hi-Fi New Zealand (JB NZ), and The Good Guys (TGG). 

The company reported its Earnings before interest rates and tax (EBIT) up by 14.0% to $479.2 million (HY23). Strong sales growth and improved gross margins, though partially offset by an increase in CODB as the Group cycled Covid-related store closures in the pcp.

Its Net profit after tax (NPAT) surged 14.6% to $329.9 million. Earnings per share grew 20.4% to 301.8 cps.
The consumer electronics market in Australia is forecast to rebound in 2023. In the medium-term it will be a core market of high-value replacement spending in established product categories, while witnessing faster growth in emerging product categories

GR Engineering Services Limited (ASX: GNG)

GR Engineering Services Limited, an Australia-based engineering, consulting and contracting company, specializes in providing engineering design and construction services to the mining and mineral processing industries. It is also engaged in the provision of operations, maintenance and well management services to the oil and the gas sector.

The company has a strong order book largely from Australia, building its pipeline for both FY23 and FY24. At 31 October 2022, GR Engineering was engaged on 29 studies in Australia, the Americas and abroad. 

GR Engineering continues to build its contracted and near-term prospective pipeline of work across a diverse commodity base and also increase its revenue and earnings visibility for FY23 and future years.  

GR Engineering reported record FY22 revenue of $651.7 million and EBITDA of $55.8 million, continuing the strong momentum generated from the prior year. 

Well capitalised to deliver its pipeline of work. Its strong order book and anticipated cashflow generation leaves it well placed to continue to deliver returns to its shareholders.

Vicinity Centres (ASX: VCX)

Vicinity Centres invests in properties and freehold/leasehold interests in land and buildings, held either to receive rental income or capital appreciation, or both. The Group aims to maintain a conservative capital structure with appropriate liquidity, low gearing, and a diversified debt profile. It has long-term credit ratings of ‘A2/stable’ from Moody’s Investors Service and ‘A/stable’ from S&P Global Ratings. Vicinity has been delivering sustained growth while remaining focused on growing current and future income via higher occupancy and negotiating a greater number of long-term leasing deals at improving spreads. The consistent and growing dividends along with potential capital appreciation make Vicinity a good investment.

Vicinity Centres has observed a positive momentum in CBD visitations, resulting in a significant 37.2% increase in CBD sales. The company's CBD portfolio played a crucial role in driving the overall sales performance of its entire portfolio. Vicinity Centres has also achieved notable development milestones, successfully completing multiple projects.

Woodside Energy Group Ltd (ASX: WDS)

Woodside Energy Group Ltd has evolved into a truly global company following the merger last year with BHP’s petroleum business as the company delivered record profit and became an even bigger supplier of energy to the world. 

Woodside Energy Group Ltd has taken significant steps towards the advancement of its energy projects. Notably, the company has approved the final investment decision for the Trion resource development in Mexico, with expectations of delivering shareholder returns exceeding the capital allocation framework targets upon its projected start-up in 2028.

The numbers of projects that progressed in 2022 and are in the pipeline reflect the product mix and diversity of location. Woodside can maximize prospects for long-term success against an uncertain energy transition through the continued development of its diverse portfolio and consistent strong operational and financial performance. Increasing its access to global capital markets, Woodside is also listed on the New York and London stock exchanges.

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Frequently Asked Questions (FAQ)

What are dividends?

Dividends are part of the profits that is distributed among shareholders.

How are dividends paid?

Most Australian stocks on the ASX pay dividends twice a year, as interim dividend, and final dividend. Whereas ETFs generally pay it on quarterly basis.

What are the best ASX dividend stocks?

NRW Holdings Ltd.
Virgin Money UK Plc
Smartgroup Corporation Ltd
Ascent Group Ltd
Dairymple Bay Infrastructure Ltd 
These are the stocks with high dividend yield and have given high one year return.

Should you focus on dividends while investing?

Dividends offer a certain amount of reliability while offering supplemental income. However, many a times just considering dividend yield could be deceptive. It should be considered in conjunction with other parameters like payout ratio and the balance sheet.

What is a good dividend yield and how important it is while selecting a stock?

A low dividend yield only should not be a cause of concern if you are aware of its underlying business. Different sectors use the earnings in a different way. Tech sectors use this mainly for growth. Like Apple Inc., though paying a small yield spends most of its earnings on R&D. Over a period, investors in such companies get rewarded. Many good companies, though not paying high dividends, take care of their investors by offering bonus/rights issus.



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