The 10 Best ASX Dividend Stocks to Buy in 2024

Dividend stocks are a big deal in Australia for two reasons. Australians tend to favour income growth in their investments over capital gains and the country’s tax laws encourage investment in dividend stocks.

Australia’s imputation system uses franking credits for dividends that partially or fully offset the inherent tax investors have already paid on a company’s profits. The franking credits reduce the overall tax benefits of dividends, making them more attractive.

There are no dividend aristocrats (stocks that have increased their dividends for 25 or more consecutive years) in Australia because many of the dominant stocks on the Australian Stock Exchange (ASX) tend to be in cyclical sectors, such as financials, basic materials, consumer goods and real estate. Companies in cyclical sectors have more volatile earnings, so sometimes their dividends rise or fall with their fortunes.

We have taken a look at the best Australian dividend stocks based on a variety of factors. We picked 10 of the top dividend stocks on the ASX to buy right now.

Best Australian dividend companies to invest in 2024

Here’s a quick list of our selections of the Australian stocks that have great passive income. If you’re looking for dividend stocks outside of Australia, our experts regularly review other markets and suggest stocks for income investors.

1. StepOne Clothing: The Sydney-based company focuses on direct to customer online sales of its organically grown underwear, marketing its products in Australia, the US and the UK. The small-cap stock’s dividend yields around 4.78% and is fully franked.
2. IPH Limited: The international intellectual property services group, based in Sydney, focuses on IP services in Australia, New Zealand and Asia with clients in more than 25 countries. It also sells a subscription-based model for timekeeping software. Its dividend yield is around 4.9% and has a dividend that is partially franked.
3. Dexus Industria REIT: The Australian real estate investment trust (REIT) specialises in high-quality industrial warehouses, with a $1.4 billion portfolio with locations in Sydney, Melbourne, Brisbane, Perth and Adelaide. Its dividend yields around 5.96% but is only partially franked.
4. Dalrymple Bay: The infrastructure company operates the Dalrymple Bay Terminal, a multi-use facility that is the world’s largest export metallurgical coal facility. It has a dividend that yields 7% and is fully franked.
5. Helia Group: Founded in 1965 as Genworth Mortgage Insurance Australia Limited, Helia is now Australia’s largest provider of home lenders insurance and an insurer to lender customers. Its partially franked dividend yields a whopping 15.36%.
6. Lindsay Australia: Founded in 1953, the small-cap company based in Acacia Ridge, Queensland provides integrated transport, rural supply services and logistics, mostly to the agricultural industry in Australia and New Zealand. Its dividend yield is around 5.3% and the dividend is fully franked.
7. Eagers Automotive: Established in 1913, the Newstead, Queensland-based company manages more than 250 automotive dealerships in Australia and New Zealand, selling new and used vehicles, parts and repair services. Its fully franked dividend yields around 7.21%.
8. Inghams Group Ltd.: The largest integrated poultry producer across Australia and New Zealand is responsible for much of the chicken sold at Australia’s fast-food outlets and supermarkets. Founded in 1918, the North Ryde, New South Wales-based company has stock with a dividend yield of around 6.01% and is fully franked.
9. Rio Tinto: The world’s second-largest minerals and metals mining company behind BHP Group, Rio Tinto, based in Melbourne, mines in 35 countries across six continents. Its dividend yield is around 5.45% and the dividend is fully franked.
10. WAM Global Ltd.: The Sydney company focuses on investments in overlooked small-cap and mid-caps stocks. It looks to provide capital growth over the medium-to-long term and deliver fully franked dividends. Its dividend yields about 5.4%.

Year-to-date performance of the best dividend stocks on the ASX:

Ticker on ASX	Company	Performance YTD
STP	StepOne Clothing	+38%
IPH	IPH LTD.	-3.13%
DXI	Dexus Industria REIT	+2.92%
DBI	Dalrymple Bay Infrastructure	+11.81%
HLI	Helia Group	-12.41%
LAU	Lindsay Australia	-22.03%
APE	Eagers Automotive	-29.75%
ING	Inghams Group LTD.	-6.91%
RIO	Rio Tinto	-12.41%
WGB	WAM Global Ltd.	+10.55

An in-depth look at these top ASX dividend stocks

Here are 10 solid companies, all of which provide a dividend yield of at least 4.5%. These are some of the best long-term dividend stocks on the ASX for income investors:

1. StepOne Clothing: Average 2-year annualised return of -28.77%

StepOne founded in 2017, sells organically grown and sustainable underwear made mainly from bamboo viscose. All of its packaging is 100% compostable. As a testament to its commitment to sustainability, it was the first Australian company to sign the Global Fashion Forever Green Pact. It’s the first Australian clothing retailer to have an end-to-end FSC certified supply chain.

StepOne had a strong first half to fiscal 2024, with revenue rising 25.5% year over year in the six months that ended in December to AUD 45.1 million. It has 1.54 million customers globally at the end of the period, up 40% from a year earlier. Net profit after tax (NPAT) was AUD 7.1 million, up 34.7% year over year. In 2020, it added a line of women’s underwear in the UK and Australia and has seen big gains in a short period. StepOne said it’s planning to introduce its women’s line to the US. The brand has also seen traffic to its website increase by 18%.

Thanks to its sales through Amazon, it saw its US customer base rise by 62% from last June and US revenue rise by 256.2% year over year. It also saw a 38% gain in revenue in the UK, thanks in part to its partnership with iconic retailer John Lewis.

It has an AUD 0.04 interim dividend, which means a 100% payout ratio. That would be cause for alarm, but considering its growing revenue, and profits, and a solid financial position with no debt, that’s not that big a risk. 

2. IPH Ltd: Average 9-year annualised rate of 6.45%

IPH is the No. 1 patent group in Australia, New Zealand and Singapore and continues to grow through regular acquisitions. It benefits from its placement in an industry that has significant growth potential. As new technologies emerge and international trade grows, the demand for IP services such as patent filing, enforcement and litigation increases. The group includes leading IP firms AJ Park, Griffith Hack, Pizzeys, ROBIC, Smart & Biggar, Spruson & Ferguson and online IP services provider Applied Marks.

In the six months ended December 31, IPH saw revenue rise 21% year over year to AUD 274.4 million, and underlying EBITDA rise 13%, over the same period a year ago, to AUD 90.4 million, while NPAT fell 26% year over year to AUD 21 million. The revenue rise was helped by 2023 acquisitions in Canada of Ridout & Maybee and ROBIC, offset partially by market decline in Asia. 

It increased its interim dividend by 3.2% to AUD 0.16, and it is 35% franked. That’s a slowdown compared to the company’s average dividend increase of 19% over the past nine years. The payout ratio is high at 94%, but the company’s steady revenue growth eases concerns over that somewhat. 

3. Dexus Industria REIT: Average 10-year annualised rate of 2.67%

While REITs are hurting in many cases because the rise in interest rates have made it more expensive for REITs to borrow to expand while making other high-yielding investments seem more attractive. However, Dexus Industria’s shares are up more than 2% this year as the company occupies a solid niche of growth due to market trends toward the growth of e-commerce and population growth that is fueling increased supply demands on businesses.

Dexus Industria has been in business for 35 years and is managed by Dexus (ASX: DXS), one of Australia’s top fully integrated real asset groups. Dexus Industria’s 91 properties are 99% occupied, with an average lease remaining of 6.1 years. The company just upgraded its guidance to say it expects full-year funds from operations (FFO) per share of AUD 0.174, up from earlier expectations of AUD 0.171, citing several factors, including positive leasing outcomes and lower net finance costs. 

The company’s half-year results were mostly positive. FFO rose 0.5% year over year to AUD 23.3 million, and FFO per share was up 0.5% to AUD 0.086. That meant that FFO payout ratio for its dividend dropped to 95.5%, compared to 96% a year ago, within the safety guidelines for a REIT, which for tax purposes is expected to distribute to shareholders at least 90% of taxable income. The company has AUD 269 million worth of property projects in its pipeline, most of which should be completed by 2027, so that will add to its revenue growth. One downside is its most recent dividend, paid on May 16, was only 11.4634% franked.

4. Dalrymple Bay: Average 3-year annualised rate of 13.48%

Though coal is not a green fuel, the needs of the steelmaking industry continue to drive trade of metallurgical coal. The transition to net zero emission standards will affect thermal coal more than metallurgical coal, essential to help make steel.

Dalrymple Bay Infrastructure owns, through a 99-year lease, the Dalrymple Bay Terminal (DBT), which is crucially situated near the Bowen Basin in central Queensland, the world’s richest coal export region. The high quality of the coal from Bowen Basin and the need in Asian markets, especially China, Japan, Korea, Taiwan and India, for the product, are Dalrymple Bay’s growth impetus. 

The company reported AUD 642.1 million in 2023 revenue, up 268% from 2020, the year before its initial public offering (IPO) was completed, and up 2.9% compared with 2022. Net profit was up 17.3% in 2023 from 2022 to AUD 63.9 million.

Last year, the company paid out AUD 0.208 in dividends, up 8.4% from the year before. It recently raised its quarterly dividend by 7% over the same period last year, to AUD 0.0538. The main concern, though, is its high payout ratio (138%), based on last year’s payouts. Obviously, that’s unsustainable in the long run, even for a company that is in essence operated in a utility-like fashion with stable cash flows.

However, if Dalrymple can get back to its 2021 level of profitability, when it had EPS of AUD 0.26, the payout ratio would drop down to 76.9%. Also, as the firm becomes more diversified, serving more mining companies not just coal companies, falling coal demand becomes less concerning. In the short run, demand is more secure, as Dalrymple estimates that significant metallurgical coal volumes will continue to move through DBT beyond 2050.

5. Helia Group: Average 10-year annualised return of -0.54%

Helia’s shares have risen 10.66% so far this year, but the stock remains a bargain with a price-to-earnings ratio of around 4.51. The cost of homes has risen in Australia, along with inflation, making it harder for prospective homeowners to afford a large down payment. That works in Helia’s favour as it means more homes must carry lenders mortgage insurance (LMI).

In 2023, its net profit grew 36.7% to AUD 275.1 million. Earnings per share (EPS) rose to AUD 84.7 million compared to AUD 52.6 million in 2022. The news wasn’t all good, as its 2023 gross written premium fell 42.1% to AUD 185.2 million, due to the depressed market conditions for new lending, particularly in high-loan-to-value-ratio lending. Revenue dropped 8.6% to AUD 427.3 million.

Helia’s huge yield of 15.36% appears safe with a payout ratio of 33.77%. The company paid out $0.55 per share in dividends last year and this year. It’s on track to pay out $0.59 per share in dividends after increasing its special dividend by 33% to $0.40. It also has been active in stock buybacks, reducing its number of shares out by 13.4% through AUD 156.2 million in stock repurchases. This year, Helia is forecasting it will buy 60 million more shares.

6. Lindsay Australia: Average 10-year annualised return of 9.48%

Lindsay focuses on logistics for the agriculture, horticulture and food-related industries. It mainly helps farmers package, transport and distribute their produce throughout Australia and globally, moving 15% of the horticulture in Australia. It operates in three segments: Lindsay Rural, which sells packaging supplies for agricultural products, fertilisers, chemicals and irrigation equipment; Lindsay Transport, which provides general, dry and refrigerated transport, and Lindsay Fresh Logistics, which stores, fumigates, and provides services for the import and export of fruit and vegetables.

Wet weather this spring in North Queensland may mean Lindsay will deliver fewer crops this year, but in the long run, the company benefits from increases in population and immigration growth and the demand for efficient road and rail services. The firm expects commercial freight volumes to grow 6% year over year in the second half of fiscal 2024.

Lindsay reported solid fiscal first-half numbers, with revenue of AUD 417.9 million, which rose 23.9% year over year. Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of AUD 52.1 million, up 21.7% year on year during the same period. It invested AUD $25.6 million in the first half to improve its trucking and rail fleet. While it borrowed AUD 154 million to do so, its earnings growth meant its net leverage improved to 1.21x. This was 4.9% better than in the first half of fiscal 2023.

The stock appears a buy because of its 87.1% revenue growth over the past five years, plus it is trading for just a little more than eight times earnings. It raised its interim dividend 10.5% to AUD 0.021, and it is well covered with a payout ratio of 33%.

7. Eagers Automotive: Average 10-year annualised rate of 5.81%

Thanks to a series of acquisitions, Eagers Automotive, has impressively grown annual revenue by 139.5% over the past five years, while improving EPS by 113% in that period. With that growth, its dividend also rose by 103%. It has a 10% share of Australian auto sales. It’s No. 1 new and used car retailer in the country. 

Despite reporting that revenue was up 18.3% year to date in April, the stock has fallen more than 29% this year after the company forecast that first-half profit would be down 15%. The lower margins, the company said, are because rising inflation is hurting consumers and that, in turn, is forcing tighter margins on Eagers to grow automobile sales. 

The downgrade is likely to be temporary and provides an attractive opportunity to buy a stock that is trading for just more than nine times earnings with a high-yielding dividend. Eagers is taking advantage of its stock lull by buying back stock. It just finished a $5.3 million stock repurchase program, and said it was starting another round of stock buybacks. The company is seeing the potential for improved margins with its automall concept, as well as increased margins from selling pre-owned vehicles.

8. Inghams Group Ltd.: Average 5-year annualised return of -5.39

Inghams produces and sells chicken and turkey products in Australia and New Zealand across its vertically integrated, free-range, value enhanced, primary processed, further processed and by-product categories. It makes stock feed for internal use and also sells it to poultry and pig farmers.

The poultry producer is in the midst of buying out New Zealand based organic chicken supplier Bostock Brothers for NZD 35.3 million (AU$32.2 million). The deal includes Bostock Brothers’ primary processing plant in Hawke’s Bay on New Zealand’s North Island, as well as three freehold farming properties. Inghams said it expects the Bostock Brothers brand to add to EPS immediately.

The concerns about the Avian Flu in NSW are overblown for Inghams, according to many analysts, presenting a buying opportunity. Bell Potter analyst Jonathan Snape has maintained Ingham’s buy rating and price target of AUD 4.35 on the stock.

In the fiscal first half of 2024, Inghams reported revenue of $1.64 billion, up 8.7% on the same period a year earlier. EBITDA of AUD 253.7 million, up 28.8% from the first half of 2023. NPAT was AUD 62.3 million, a rise of 286.6% year over year. 

Inghams has benefited from price increases, both from its poultry goods, but also from the rising cost of beef, which means more consumers are turning to chicken for their protein needs. Ingrams raised its interim dividend to AUD 0.12, up 166.7% over the same quarter a year earlier. The dividend remains fully franked.

9. Rio Tinto: Average 10-year annualised return of 6.4%

Rio Tinto makes most of its revenue from iron ore mining, but it also produces lithium, aluminium, copper, silver, gold and diamonds. While mining is a volatile industry, it’s worth noting that the Melbourne-based company has been operating since 1873. It has paid a dividend for more than 33 consecutive years. The payout ratio on its dividend is 64.3%, safe for a company with consistent cash flow like Rio Tinto. The stock trades for less than 11 times earnings.

Iron ore prices had been down, and that meant that its earnings were down as well. Its underlying earnings in 2023 dropped 12% to $11.8 billion from $13.4 billion a year earlier. Its final dividend payment from 2023 earnings was $2.58 a share, compared with a final dividend of $2.24 in 2022.

However, there is reason for optimism, as iron ore prices may rebound, and the miner is ramping up its production of other minerals. The current price of iron ore is around $111 per tonne, up from under $100 per tonne in April. There are hopes that China will start more stimulus measures and that would likely increase the need for iron ore.

Rio Tinto is increasing its focus on lithium and copper, two key minerals for electric vehicles (EVs) and their batteries. It could soon restart its Jadar lithium mining project in Serbia which had been on hold. Two years after halting the projects, the Serbian government appears to be ready to give the OK for the mine, the largest lithium mine in Europe. Rio Tinto is also developing a lithium brine project in the Salta Province of Argentina. 

10. WAM Global Ltd.: Average 5-year annualised return of 0.18%

Most of its holdings are in US-based stocks, at 67.2%, with Germany stocks being No. 2 at 11.8% and Australian stocks No. 3 at 4.2%. The company has been listed on the ASX since 2018, but is part of Wilson Asset Management, which was founded in Sydney in 1997. It is one of the first listed investment companies (LIC) in Australia to offer investment and social returns.

In its interim report, WAM Global delivered total shareholder returns of 10.9%, including a $0.06 fully franked interim dividend. Revenue was 45.39 million, up 129.66% year over year. EPS was $0.08, up 155.97% from the same quarter a year earlier. Its fund was up 5.8% through six months, topping the MSCI World Index (up 4.9%), and the MSCI World SMID Cap Index (up 4.7%).

The investment company has more than tripled its yearly dividend payout over the past five years, thanks to its consistent growth. This year, it’s on track for $0.12 per share in dividends, up 4.3% over last year. So far this year, its stock price is up more than 11%. While many LICs tend to underperform in bull markets, WAM Global has outperformed most of its peers.

What are ASX dividend stocks?

They are shares on the Australian Securities Exchange (ASX) that pay out a portion of their profits to shareholders as dividends. These are sometimes called income stocks. These dividends are a major draw for Australian investors due to the country’s imputation system, which provides tax benefits for dividends received.

Pros and cons of investing in Australian dividend stocks 

There are advantages and disadvantages to investing in ASX dividend stocks.

Some of the pros of buying ASX dividend stocks:

They provide a regular income stream: ASX companies are known for their high dividend yields compared to many other markets. This means you receive regular cash payments, which can be helpful for income generation, especially for retirees.

The tax advantages of franking credits: Franking credits attached to dividends can significantly reduce your tax liability on the income received. This makes ASX dividend stocks even more attractive for income generation.

Hedge against inflation: Dividends can help hedge against inflation, especially if they grow over time. As the cost-of-living increases, so can your dividend income, providing some purchasing power protection. Dividend stocks, if the yield is high enough, are popular investments even in high interest rate environments.

Stability: Companies that can continue to raise dividends are generally less volatile and less risky than high-growth stocks.

Some of the cons of ASX dividend shares:

Lower growth potential: Dividend-paying companies often prioritise returning profits to shareholders through dividends rather than reinvesting heavily for future growth. This can limit their capital appreciation compared to high-growth stocks.

High yields may mask issues: A high dividend yield can be tempting, but it’s not the only factor. Companies may prioritise maintaining high dividends even if it’s unsustainable or a sign of underlying financial issues.

Dividend cuts are possible: Dividends aren’t guaranteed. Even established companies can cut dividends if they face financial difficulties. This can negatively impact your income stream and potentially the stock price.

Do I need to pay tax on Australian dividend stocks?

Yes and no. It depends on what type of dividend it is and your residency status. Whether you need to pay tax on Australian dividends depends on the type of dividend and your residency status.

Franked dividends: These are the most common type of dividends in Australia. This means that the company has already paid Australian company tax on the profits before distributing them as dividends. You may be entitled to a franking credit, which offsets some or all of the tax you would normally pay on the dividend.

Unfranked dividends: These are profits the company hasn’t paid Australian company tax on. You’ll generally pay tax on the full amount of the dividend at your marginal tax rate.

If you are an Australian resident:

Franked dividends: You may receive a franking credit on your ASX shares which reduces your tax liability.

Unfranked dividends: You’ll generally pay tax on the full amount at your marginal tax rate.

If you are not a resident of Australia:

There may be a withholding tax deducted from the dividend, typically at a rate of 30%. However, Australia has tax treaties with many countries that can reduce this rate.

Determining the tax status can be complicated, and you would be best placed to ask for professional advice. The Australian Taxation Office is also a good source of information.

ASX dividend stocks FAQs