Investing in dividend stocks is a strategic way to generate consistent income and build wealth over time. Australian investors can choose between numerous domestic companies with a strong track record of robust market performance and consistent dividend payouts.
In this article, we will examine some of the top Australian dividend stocks to consider in 2024, featuring well-established companies with solid dividend yields.
List of the best Australian dividend stocks in 2024:
Fortescue: 7.85% dividend yield
ANZ Group Holdings: 6.13% dividend yield
Westpac: 5.33% dividend yield
BNH Group: 5.21% dividend yield
National Australia Bank: 4.87% dividend yield
Dividend yields are based on the trailing twelve-month periods
The 5 best dividend stocks in Australia in 2024
In the sections that follow, we will look into some of the best dividend stocks in Australia. Please note that we’ve filtered our selection to companies boasting a market cap of 75 billion AUD or more. This was done to ensure maximum long-term stability, which is usually the most important aspect of dividend investing.
1. Fortescue
Fortescue Metals Group is a major player in the global iron ore industry. It has consistently delivered high dividends, supported by strong cash flows from its mining operations. Fortescue's dividend yield is often among the highest on the ASX (Australian Securities Exchange), making it a favorite for income investors. The company's focus on sustainable operations and significant investments in green energy initiatives should also position it well for future growth.
It’s worth noting that Fortescue has been one of the better-performing stocks in the Australian market. In the past year, the company’s stock gained nearly 30%. Meanwhile, the stock gained a whopping 201% in the past five years. The market performance and higher dividend yield make Fortescue the best choice for Australian dividend investors at the moment.
Sector: Metal mining
Stock ticker: FMG.AX
Stock price (1-year change): 25.57 AUD (+29.21%)
Market capitalization: 81.6 billion AUD
Dividend yield (TTM): 7.85%
2. ANZ Group Holdings
ANZ Group Holdings, one of Australia's Big Four and best Australian private banks, offers a robust dividend yield of around 6-7%. ANZ has a long history of paying dividends, although it had to cut them during the COVID-19 pandemic. Since then, dividends have been on the rise again. The bank's strong institutional banking division and its extensive operations in Australia and New Zealand support its stable dividend payments.
Another important fundamental aspect that supports ANZ as one of the better dividend investments is its very conservative price-to-earnings ratio. At the time of writing, ANZ boasts a P/E of just 12.75, which hints at the possibility that the company might be undervalued at current stock prices.
Sector: Finance
Stock ticker: ANZ.AX
Stock price (1-year change): 27.87 AUD (+17.59%)
Market capitalization: 85.8 billion AUD
Dividend yield (TTM): 6.13%
3. Westpac
Westpac is another major Australian bank known for its reliable dividend payouts. It offers a dividend yield that typically ranges between 5-6%. Westpac has a comprehensive suite of banking and financial services and is committed to maintaining strong capital ratios and prudent risk management, which underpin its ability to pay consistent dividends.
While the company recorded a drop in profits in the first quarter of 2024, they have pointed out that the monetary policy in Australia is about to become “less restrictive within the next year,” at least in the company’s belief. This could provide a nice boost to Westpac's profits and further cement its high dividend payout.
Sector: Finance
Stock ticker: WBC.AX
Stock price (1-year change): 26.01 AUD (+22.80%)
Market capitalization: 92.3 billion AUD
Dividend yield (TTM): 5.33%
4. BHP Group
BHP Group, one of the world's largest mining companies, is a prominent dividend payer on the Australian Stock Exchange and one of the most well-established stocks globally. BHP's dividend yield is attractive, and the company has a policy of paying out a substantial portion of its earnings to shareholders. Its diversified mining operations, including iron ore, copper, and coal, provide a stable revenue base to support dividends
It’s worth noting that BHP was focused on a $49 billion takeover of Anglo American, a British miner, for the better part of this year. These talks have all but fallen through, according to the latest reports, which could translate into a small stock price drop for BHP in the short term. However, some analysts believe that the takeover is still on the table. If BHP succeeds in its bid, it would further cement its position as the largest mining company in the world.
Sector: Metal mining
Stock ticker: BHP.AX
Stock price (1-year change): 45.08 AUD (+3.85%)
Market capitalization: 228.5 billion AUD
Dividend yield (TTM): 5.21%
5. National Australia Bank
National Australia Bank (NAB) is well-capitalized and offers a solid dividend yield of around 5-6%. NAB has a cautious dividend payout policy, maintaining a payout ratio that balances rewarding shareholders and retaining sufficient capital for growth and stability. The bank's strategic focus on strengthening its balance sheet and prudent loan growth supports its long-term dividend sustainability.
In the past 12 months, NAB stock gained more than 26%, which is more than many other companies listed on the Australian Stock Exchange. This means that NAB provides value not only as a steady passive income stream but also as a purely value investment.
Sector: Finance
Stock ticker: NAB.AX
Stock price (1-year change): 33.65 AUD (+26.46%)
Market capitalization: 106.2 billion AUD
Dividend yield (TTM): 4.87%
The bottom line
The companies included in our list are among the best dividend stocks in Australia for 2024, providing a combination of high yields, financial stability, and growth potential. When selecting dividend stocks, it's crucial to consider factors like dividend sustainability, payout ratios, and the company's overall financial health to ensure a reliable income stream.
If you want to expand your portfolio with proven US market focused dividend stocks, check our list of the best long-term dividend stocks.
For more investment ideas, you can look into our list of the best monthly dividend ETFs or the best dividend stocks in Canada if you are looking for additional diversification.