10 Best ASX Dividend Stocks to Watch 2024

In the current investment environment, portfolios focused on cash income streams are gaining popularity among Australian investors. High-yielding dividend stocks listed on the Australian Securities Exchange (ASX) represent an attractive option for investors seeking consistent returns and passive income.

This comprehensive guide will provide an in-depth analysis of the characteristics and factors that distinguish the best dividend stocks on ASX. Furthermore, we provide a comprehensive overview of the 10 most notable top-performing dividend stocks on the ASX, which can serve as a solid foundation for wealth creation, regardless of whether you are a seasoned investor or just starting your investment journey.

Overview of ASX dividend stocks

Dividend stocks are shares that pay regular dividends to investors and share the company's earnings with them. They are often considered a safe-haven asset class. Many large companies in the Australian market offer competitive dividends to investors, in large part due to Australia's distinctive tax policy, the Dividend Tax Credit, which allows dividends to be excluded from taxable income. This further enhances the appeal of ASX dividend stocks. Here are the characteristics of ASX dividend stocks:

International exposure

Some of the best ASX dividend stocks provide investors with international market exposure, providing a hedge against domestic economic volatility. This global diversification benefits investors looking to spread their risk.

Diversified industry representation

The ASX offers a wide range of companies across a variety of industries, from mining to financial services. This diversity allows investors to choose from a broad range of dividend stocks, each with its risks and opportunities.

Unique tax system

A notable feature of the Australian tax system is the Dividend Tax Credit. This system allows dividends to be excluded from taxable income, effectively reducing the tax burden on dividends received.

High dividend yields

ASX dividend stocks are typically characterised by high dividend yields, which can be particularly attractive to income-seeking investors. These yields can significantly boost an investor's portfolio, especially in a low-interest-rate environment.

10 Best ASX dividend stocks to watch

Identifying the characteristics of the best dividend stocks in the active market of the ASX guides investors seeking a reliable income stream. There is no single criterion for evaluating the best ASX dividend stocks. Instead, we have identified the 10 best ASX dividend stocks to watch, where our selection criteria is not the highest dividend yield but a combination of dividend payout history, the company's financial health, and growth potential.

Platinum Asset Management(PTM)

Platinum Asset Management Ltd. provides professional financial services with a particular focus on international equities. The company's core business activities revolve around fund management, complemented by a range of other investment vehicles, including foreign cash holdings, U.S. time deposits, and trust funds. The company offers a range of flexible and diversified investment products, including regional and sector-specific funds, global portfolios, and support for short selling and positions in the foreign exchange market.

• Market Cap: 12.82 million AUD

• P/B: /

• Shares Float: 12.82 million

• Founded Date：1990

Yancoal Australia Ltd(YAL)

Yancoal Australia Ltd is primarily engaged in the development and operation of coal resources. The company has a substantial portfolio of metallurgical and coal mining operations in Queensland and New South Wales, which represents the largest source of revenue. Furthermore, the company operates its own coal mines in Mulabane, Hunter Sawley, Mount Warkworth, Yarrabee, and Middlemount. In addition to serving the Australian domestic market, the company also operates in various locations in Southeast Asia.

• Market Cap: 9.02 billion AUD

• P/B: 1.068

• Shares Float: 371.52 million

• Founded Date：2004

Woodside Energy Group Ltd (WDS)

Woodside Energy Group Ltd. is a leading developer and producer of hydrocarbons and oil and gas, and it is expected to be the most highly leveraged company in the global market for LNG. Its principal business activities involve the development, production and sale of liquefied natural gas, pipeline natural gas and liquefied petroleum gas.

Abacus Group(ABG)

Abacus Group's main business includes storage, office, retail and industrial properties, as well as a number of sub-sectors. Notably, the company's management is separating the storage business in 2023, which is expected to be seen as a potential catalyst for the market to recognize the potential value of Abacus' assets.

• Market Cap: 929.4 million AUD

• P/B: 0.532

• Shares Float: 426.95 million

• Founded Date：1996

New Hope Corporation(NHC)

New Hope is Australia's leading developer and producer of coal resources, with the vast majority of its production sold to overseas markets. The company is also involved in port logistics, oil and gas exploration and agricultural production. It has two major coal mines under its umbrella: the New Acland Coal Mine in Queensland (100% owned) and the Bengala Coal Mine in New South Wales (80% owned). According to the latest news, New Hope expects to produce approximately 13 million tonnes of equity-marketable thermal coal per annum from 2028 onwards, driven by the construction and expansion of New Acland Stage 3.

• Market Cap: 4.07 billion AUD

• P/B: 1.625

• Shares Float: 492.52 million

• Founded Date：1986

WAM Capital Ltd(WAM)

As a closed-end investment fund, WAM Capital Ltd. focuses on a variety of investment activities, including equity, term deposits, and cash investments. With regard to product selection, the fund offers exposure to relative value arbitrage and market mispricing opportunities, as well as a portfolio of undervalued growth companies. WAM Capital's investment objective is to provide a range of fully paid dividends and to generate capital growth.

• Market Cap: 1.66 billion AUD

• P/B: 0.943

• Shares Float: 1.11 billion

• Founded Date：1999

Cromwell Property Group(CMW)

Cromwell Property Group is primarily engaged in real estate investment and related fund management activities. Its business activities include fund management for individual and institutional investors, investment in warehouse assets, and management of investment properties in Australia. The latest news indicates that the group plans to sell its European business by 2024. The sale, once completed, will enable a significant reduction in assets and liabilities.

• Market Cap: 1.07 billion AUD

• P/B: 0.568

• Shares Float: 1.34 billion

• Founded Date：2006

Magellan Financial Group(MFG)

Magellan Financial Group provides professional money management services, with a particular focus on equities and funds for retail individuals and institutional investors in their home markets. The company is structured around three divisions: the Fund Management division provides investment management and related advisory services; the Fund Investments division includes direct investments in selected fund products and a portfolio of equities listed on Australian and global markets; and the Magellan Capital Partners division provides a portfolio of partner companies.

• Market Cap: 1.64 billion AUD

• P/B: 1.754

• Shares Float: 170.23 million

• Founded Date：2004

Fortescue Ltd(FMG)

Fortescue Ltd. is a leading Australian iron ore miner and the world's fourth largest iron ore producer. The company's principal business activities are exploration, development, production, processing, transportation, and marketing of iron ore. Additionally, Fortescue has made significant investments in the green energy sector in recent years, with a focus on developing green power, green hydrogen, and green ammonia projects.

• Market Cap: 55.73 billion AUD

• P/B: 1.874

• Shares Float: 1.58 billion

• Founded Date：1983

Helia Group(HLI)

Prior to its listing on the ASX in 2014, Helia was a subsidiary of NYSE-listed Genworth Financial. Today, Helia is Australia's leading provider of lenders' mortgage insurance (LMI). The company is regulated by the Australian Prudential Regulation Authority (APRA) and also participates in the development of residential mortgage policies with local and international regulators, governments, industry bodies, and other lenders.

• Market Cap: 1.09 billion AUD

• P/B: 0.958

• Shares Float: 282.7 million

• Founded Date：2011

• Revenue Breakdown:

*Please note that the company's share price, market capitalization, dividend yield, and other metrics are subject to fluctuations over time and in response to market conditions. To obtain the most up-to-date information, we recommend you visit the ASX or check the Moomoo platform.

Final words on best ASX dividend stocks

Looking at the ASX's top-performing dividend stocks, it is easy to see that large-cap mining stocks make up the majority, thanks to Australia's abundant mineral resources. A large proportion of ASX's dividend stocks are blue-chip, so they do not offer the same excess capital gains that growth stocks do and are more suited to investment strategies that seek a stable return, such as retirement plans.

Investors favor dividend stocks because of the stable returns on the one hand and the lure of tax-free dividends on the other. However, using dividend yield alone as the basis for investment decisions can easily lead investors to fall into the dividend trap. Past dividend payout history, dividend growth figures, and the company's financial position should not be overlooked when considering what makes the best dividend stocks on ASX.

Australia's large mining stocks may provide investors with great returns, but investing in all of them means a greater concentration of risk. While dividend stocks provide stability, sound risk management is essential, and investors are advised to diversify across multiple sectors to reduce risk further. Additionally, companies with resilient dividends typically exhibit a diversification of sources of interest across industries, so diversification of company interests and revenues is also important.

Finally, the content of this article is for investors' reference point only. The past performance of a stock is not indicative of future returns, so please always consider carefully and do your due diligence before making any investment decisions.