This article was originally published at MF & Co. Asset Management.
If you are entering a stage where you are looking for Australian dividend stocks that have a strong and predictable dividend yield and prefer dividend investing, the best place to look is for companies that are mature and dominant in their field.
With the market correction towards the end of 2018, a lot of stocks which were trading at a lower dividend yield due to strong a stock price are now yielding much higher than before.
The great thing about corrections in the market is that even though the market is pricing stocks at a much lower price, the fundamentals of the stock hasn’t changed. This means dividend investing will allow you to get in at a lower price, boosting dividend yield.
If you are looking to buy Australian dividend stocks for the long-term and looking for strong stable dividend yield, these are some of the best dividend stocks to buy now on the ASX for 2019.
Please note that all the dividend yields are quoted grossed up which means it includes the franking credits and will also be higher or lower depending on the share price on the day.
Best Dividend Stocks To Buy Now With Great Dividend Yield
The hardest part when it comes to dividend investing is to uncover shares that have the strongest most predictable revenue lines and are market leaders in their field. Without a doubt, some of these best dividend-paying stocks will be familiar names to you and form the bedrock of many Australian stock portfolios.
Our Research team has been hard at work finding the best dividend stocks to buy now in Australia for dividend investing. I’ve outlined 5 stocks that we feel represent some of the best value in the Australian market.
Pioneer Credit (ASX PNC)– Pioneer Credit Limited (ASX PNC) is a financial services provider, specialising in acquiring and servicing retail debt portfolios. Overall, ASX PNC shares have the potential to surge after three years of strong performance if they continue to grow at the rate they are now.
Leading in corporate governance practices, high EPS growth and outperformance relative to the industry, we expect ASX PNC shares to have a bright future ahead. PNC pays a strong dividend yield of 9.35% which grew 50% last year and has the potential for not just dividend growth, but capital gains too. This makes Pioneer Credit one of the best dividend shares as their dividend yield grows with their business.
CSR Limited (ASX CSR) – CSR is an Australian listed company that manufactures and sells building products, aluminium, and house design solutions. CSR has seen a strong year on year EPS growth with a lower PE ratio than its peers. CSR has a built their business towards sustainability which is in line with new homeowner demand and a good stock to be in for dividend investing.
CSR is currently paying about 11.27% in dividend yield and has a one-year dividend growth of 13.15% and is a great Australian dividend stock.
Medibank Private (ASX MPL) – Medibank Private (ASX MPL) is an Australian-based private health insurance provider. Medibank is in the business of underwriting and distribution of private health insurance policies through Medibank and ahm brands. Since this is such a stable industry, Medibank can be considered one of the best dividend shares with predictable revenue.
Medibank shares have had a good dividend history and recently increased its interim dividend by 4.8% to 5.5cents. We consider Medibank to be a reliable blue-chip stock for dividend investing with a strong dividend yield of about 7.16%.
AGL (ASX AGL)– is an Australian energy juggernaut that has seen the rise of electricity costs line the electricity provider’s pockets. AGL has outperformed its peers financially and with a lower PE and with higher prices on the horizon. We expect strong profits to continue and will be great for dividend investing.
AGL is paying a massive dividend yield of 13.86% in the past year and one year dividend growth was 115.98%. This can be attributed to the strong performance in the past year from the company.
Wesfarmers (ASX WES)– Wesfarmers is one of the largest companies in Australia and owns the very successful Bunnings and Coles brands. Wesfarmers has run into some trouble recently with a failed Bunnings UK business and a resurgent Woolworths (ASX WOW) which has put pressure on their supermarket business.
However, they have now cut the Bunnings UK business and just divested their Coles business, which means there is a lot of flexibility ahead for Wesfarmers to get perform even better.
Wesfarmers currently pays about 13.55% in dividend yield. Dividend growth was previously 12.63% and after the spin-off of Coles, is now 43.50%. We can expect dividends to grow even stronger from here on out and this stock is considered to be one of the best dividend shares.
Make Your Money Work Harder For You
Picking the best dividend stocks to buy now for dividend investing, timing the entry and having an edge in the market is not easy. Download our special report below for another 5 best shares to buy now which comes with an options strategy that we use for our clients that can generate additional income over your existing dividend or growth shares.
Henry Fung is a Partner Managing Director and co-founder of MF & Co. Asset Management. He is a highly experienced equities, derivatives and financial markets professional with over 12 years of experience. Henry specialises in building trading algorithms & systems, quantitative & qualitative analytics across macroeconomic, fundamental and technical disciplines and currently runs the MFAM VPAC AU/US models portfolios. The management Partners and Adviser team have decades of experience between them, with experience from major Investment Banks and Brokers. Their Advisers are highly experienced, having dealt with some of the wealthiest clients in Australia.