Dividend Stocks in Australia

Highlights 5 dividend stocks in the Australian stock market in 2023, which are the top 5 weights contributing to iShares S&P/ASX 20 ETF. Focusing on their index contribution weight, dividend payout ratio, 5-year average dividend yield, market cap etc.

What is a Dividend Stock?

A dividend stock is a type of investment where the company pays out a portion of its earnings to shareholders, typically in the form of cash or additional shares. These payments, known as dividends, provide investors with a steady income stream and can be an essential part of a well-rounded investment portfolio. In addition, Payout ratio shows the percentage of a company's earnings paid out as dividends to shareholders.

1. BHP GROUP Limited Dividend (ASX:BHP)

Contribution weight ASX 20*: 16.73%

Market Cap**: A$233.73 Billion

Forward annual dividend yield**: 9.07%

5-year average dividend yield**: N/A

Payout ratio**: 90.91%

BHP is a global diversified miner mainly supplying iron ore, copper, and metallurgical coal. The merger of BHP Limited and Billiton PLC created the present-day BHP Group. The dual listed structure from the 2001 BHP and Billiton merger was collapsed in 2022. Major assets include Pilbara iron ore, Queensland coking coal, and Escondida copper. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets were spun off and merged with Woodside in 2022, with BHP vesting the Woodside shares it received to BHP shareholders. BHP is growing its nickel business to supply more battery grade nickel and is also entering the potash market through the development of its Jansen mine in Canada.

2. CBA CommBank Dividend (ASX:CBA)

Contribution weight ASX 20*: 12.47%

Market Cap**: A$179.72 Billion

Forward annual dividend yield**: 4.00%

5-year average dividend yield**: 4.57%

Payout ratio**: 66.68%

Commonwealth Bank is Australia's largest bank with operations spanning Australia, New Zealand, and Asia. Its core business is the provision of retail, business, and institutional banking services. The bank has emphasised its focus on banking in recent years with a numbers of asset divestments in wealth management and insurance.

3. CSL Limited Dividend (ASX:CSL)

Contribution weight ASX 20*: 10.92%

Market Cap**: A$129.13  Billion

Forward annual dividend yield**: 1.26%

5-year average dividend yield**: 1.07%

Payout ratio**: 51.57%

CSL is one of the largest global biotech companies and has two main segments. CSL Behring either uses plasma-derived proteins or recombinants to treat conditions including immunodeficiencies, bleeding disorders and neurological indications. Seqirus is now the world’s second largest influenza vaccination business and was acquired in fiscal 2015. CSL has a strong R&D track record, and the product portfolio and pipeline include non-plasma products as the firm continues to broaden its scope. Originally formed in Australia as a government-owned entity, CSL now earns roughly half its revenue in North America and a quarter in Europe.

4. National Australia Bank Dividend (ASX:NAB)

Contribution weight ASX 20*: 6.72%

Market Cap**: A$89.12  Billion

Forward annual dividend yield**: 5.93%

5-year average dividend yield**: 5.52%

Payout ratio**: 66.58%

National Australia Bank is the most business-focused of the four major banks, holding the largest share of business loans and the number-three spot in home loans. National Australia Bank is currently the third-largest bank by market capitalisation, with the franchise covering consumer, small business, corporate, and institutional sectors. Under the UBank brand the bank also owns one of Australia’s largest digital-only banks. Offshore operations in New Zealand round out the group.

5. Westpac Banking Corporation Dividend (ASX:WBC)

Contribution weight ASX 20*: 5.82%

Market Cap**: A$78.31 Billion

Forward annual dividend yield**: 6.44%

5-year average dividend yield**: 5.55%

Payout ratio**: 71.67%

Westpac is Australia's oldest bank and financial services group, with a significant franchise in Australia and New Zealand in the consumer, small business, corporate, and institutional sectors, in addition to its major presence in wealth management. Westpac is among a handful of banks around the globe currently retaining very high credit ratings. The bank benefits from a large national branch network and significant market share, particularly in home loans and retail deposits.

General Indicator Insight - PB, PE, PS...

Fundamental investors generally base their investment decisions on the intrinsic value of a stock. They tend to believe that when investing in a stock that is perceived to be undervalued, they are more likely to make a potential profit. Conversely, they believe that buying an 'overvalued' stock poses a higher risk of loss. The company's earnings report can provide insight into a stock's value, and fundamental investors commonly consider the following four methods.

PE, PB, PS, PEG

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Note:

**Information collected from YahooFinancial, as of July 28 2023

*Information collected from MarketScreener, as of July 28 2023

The above information is based on public market data as of 28/07/2023. It is not financial advice, recommendation or solicitation for the purchase or sale of financial products.