Top 10 ASX Dividend Stocks Heading into 2025

3. Eagers Automotive Limited (APE.AX)

Dividend Yield as of December 25: 6.34%

Eagers Automotive Limited (APE.AX) is an Australian company that is engaged in automotive retailing. It operates a network of dealerships across Australia and New Zealand, selling new and used vehicles from a wide range of well-known automotive brands. Analysts recommend investors consider purchasing shares in Eagers Automotive, highlighting its position as the leading player in Australia’s automotive retail market, with a market share exceeding 10%. They also emphasize the company’s long history of over 100 years, which they view as a testament to its longevity, strong governance, and resilience in navigating market challenges. In the past six months, the stock has surged by over 12.4%.

Eagers Automotive Limited (APE.AX) reported solid earnings in the first half of 2024. The company posted revenue of $5.5 billion, which showed a 13.4% growth from the same period last year. The Reserve Bank of Australia’s monetary policies have effectively curtailed discretionary spending in the retail sector, prompting consumers to adopt more value-focused purchasing habits. Despite this, overall demand has remained steady, with fleet sales gaining momentum as supply levels normalize. However, high interest rates and inflationary pressures continue to weigh on the company’s performance. Nevertheless, the company achieved record revenue and EBITDA, reflecting its resilience in a challenging environment.

Looking ahead, Eagers Automotive Limited (APE.AX) expects further difficulties in the second half of the year, driven by external cost pressures, inventory challenges with original equipment manufacturers (OEMs), and weakening consumer confidence. Despite these headwinds, the company remains confident in its ability to leverage opportunities in key areas such as the Retail Joint Venture, the easyauto123 pre-owned vehicle business, and enhanced results from recent acquisitions.

In addition, Eagers Automotive Limited (APE.AX) highlighted that the new car market is on course for another record year, underpinned by a strong order bank that supports both revenue and margins. It also pointed out that government policies, including the extension of the Instant Asset Write-Off and the introduction of new vehicle emission standards set for January 1, 2025, are expected to provide a further boost to trading in the second half of the year.

Eagers Automotive Limited (APE.AX), one of the best dividend stocks, offers an interim dividend of $0.24 per share and has a dividend yield of 6.34%, as of December 25.