In this article, we will discuss the best ASX dividend stocks heading into 2025.
Analysts often advise investors to diversify their stock portfolios globally to optimize returns. With this in mind, strong markets should be a key focus. Australia’s stock market is expected to perform well in 2025, driven by positive sentiment from potential central bank easing and China’s commitment to supporting its mining sector. Year-to-date, the Australian benchmark index has climbed nearly 8%, with a 12-month gain of around 9%. This was buoyed by the strong rally in the US equity markets, drawing increased attention from investors. The growth has also been led by technology and financial stocks, with the banking sector on track for its best performance since 2009. However, mining and energy stocks have faced challenges due to weaker commodity prices.
According to a report by BlackRock, broad Australian equities have been the second most favored investment within iShares’ local offerings this year, trailing only broad US equities. As of November 2024, they have attracted nearly $840 million in net inflows.
Also read: 13 Best Dividend Stocks to Buy Under $50
Banking stocks in the country made a remarkable impression in 2024, with a sectoral index surging over 30%, as of December 18—its strongest performance in 15 years—thanks to prolonged elevated interest rates. However, as the Reserve Bank of Australia gears up for potential rate cuts, banks may encounter earnings pressure due to tighter net interest margins, a crucial measure of profitability, and heightened competition. In addition, Australian lenders rank among the priciest globally, with the sector’s price-to-earnings ratio outpacing that of their international counterparts, as per Bloomberg data.
Analysts suggest that Australian resource stocks could gain from Beijing’s promise to boost government spending. However, local mining shares are heading for their weakest performance since 2015, weighed down by the ongoing slump in China’s property market, which continues to impact commodity prices. Morgan Stanley analysts including Rahul Anand said the following in a Dec. 15 note:
“As the market awaits visibility on tariff risk versus China stimulus benefits, we see opportunities for exposure to resources. Despite higher-than-normal iron ore inventories, steel inventories in China remain lower than 2019 levels creating iron ore restock opportunity.”
The Reserve Bank of Australia (RBA) projects that economic growth in Australia will rise modestly to about 1% by the close of 2024 and reach its typical pace of around 2.5% by late 2025. This recovery is expected to be largely driven by government spending, which has provided stability to the economy as higher interest rates have dampened private consumption. Analysts suggest that index investing offers an effective and efficient way to tap into the Australian market’s growth potential. S&P Global data revealed that nearly 70% of actively managed Australian equity funds have lagged behind the benchmark index over a three-year period. Over a 10-year timeframe, the disparity is even greater, with over 80% of managed funds underperforming the index. While active stock picking can complement a portfolio, they argue that tracking the benchmark might be one of the best strategies for investors seeking straightforward, long-term exposure to the growth of the local equity market.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology:
For this list, we used a screener to identify ASX stocks. From there, we selected dividend stocks with strong histories of regularly rewarding shareholders with dividends. Then, we picked the top 10 stocks with the highest dividend yields as of December 25. The stocks are ranked in ascending order of their dividend yields.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Coronado Global Resources Inc. (CRN.AX)
Dividend Yield as of December 25: 2.02%
Coronado Global Resources Inc. (CRN.AX) is an Australian company that produces high-quality metallurgical coal. The company is also a trusted supplier to the steel industry around the world. It reported strong earnings in the first half of the year. Its reported revenue of $1.34 billion and its net income came in at $16.2 million. In its earnings release, the company mentioned that 96% of its revenue was generated from Met Coal sales. As of June 30, 2024, the company reported available liquidity of $414 million and a net debt position of $5 million at the end of the first half of the year. During this period, capital expenditures totaled $137 million, which were fully financed through the business’s operational cash flows.
The significant improvement in production, sales, costs, and revenue reported in the second quarter reflects Coronado Global Resources Inc. (CRN.AX)’s ongoing commitment to enhancing all aspects of its operations, ensuring its position as a competitive and world-class provider of metallurgical coal for the long term. The company’s strategic focus on organic growth funded by operational cash flows, rather than pursuing debt- or equity-funded acquisitions, has proven wise in a market shaped by high inflation, rising taxes, and increasing royalties. In addition, progress continues on growth projects in both Australia and the United States. The Mammoth Underground project in Australia is on track to produce its first coal by year-end, pending regulatory approvals, while the Buchanan Expansion in the US is expected to be completed by the second quarter of 2025. Once fully operational, these projects are anticipated to add up to 3 million tons per annum to production capacity.
Coronado Global Resources Inc. (CRN.AX)’s cash position also remained strong. In the first half of the year, the company generated $63 million in operating cash flow. During this period, it also distributed $8.4 million to shareholders through dividends, which makes CRN one of the best dividend stocks on our list. It currently offers a bi-annual dividend of $0.05 per share and has a dividend yield of 2.02%, as of December 25.
9. MFF Capital Investments Limited (MFF.AX)
Dividend Yield as of December 25: 2.80%
MFF Capital Investments Limited (MFF.AX) is an investment company that primarily focuses on managing a diversified portfolio of investments in both domestic and international markets. The company has established itself as a well-regarded listed investment company (LIC) with a focus on global equity markets. As an LIC, it has the flexibility to adjust its investments, allowing MFF to invest across the entire global stock market. Given its broad investment scope, analysts believe that the company’s portfolio has the potential to continue generating strong double-digit returns. The recent acquisition of the investment team from the fund manager Montaka has further strengthened its outlook, and analysts expect increased investment activity in this ASX-listed company in the near future. The stock has surged by over 50% in the past 12 months.
MFF Capital Investments Limited (MFF.AX) reported its FY24 earnings in August 2024. The company maintains a robust balance sheet and strong financial flexibility. As of the year-end, its total equity amounted to $2.07 billion, which included retained profits and profits reserve of over $1.36 billion, along with contributed equity of $707.0 million. The market value of its investments was over $2.55 billion. In addition, it ended the year with nearly $89.5 million available in cash and cash equivalents, up from $28.2 million in the prior-year period.
In the financial year, MFF Capital Investments Limited (MFF.AX) saw an increase of around $9.6 million in dividends and distribution income received. The company paid out approximately $46.0 million in cash dividends, after accounting for around $17.5 million in dividend reinvestment and bonus share plan elections. Additionally, MFF made cash tax payments totaling about $60.0 million. The company was able to pay these dividends due to its strong cash generation. It reported an operating cash flow of $336.5 million for FY24, a significant increase from $137 million during the same period the previous year.
MFF Capital Investments Limited (MFF.AX) is one of the best dividend stocks on our list as the company has been growing its dividends for seven consecutive years. The company plans to continue its growth trajectory. Its dividend payout guidance indicates an expected grossed-up dividend yield of 5.1% for FY25, which includes franking credits. As of December 25, the stock has a dividend yield of 2.80%.
8. Collins Foods Limited (CKF.AX)
Dividend Yield as of December 25: 3.61%
Collins Foods Limited (CKF.AX) is an Australian company that is primarily involved in the food service and retail sectors. It operates and franchises a portfolio of well-known brands, including KFC in Australia and Europe. Though the stock has fallen by over 38% in the past 12 months, analysts are positive about its performance in the coming quarters.
Goldman Sachs highlighted in its note that the outlook has become more positive, supporting its Buy recommendation. The firm’s thesis is based on several factors: first, a moderation in cost growth, with reductions in wages, poultry, electricity, and rent, while oils and grains have returned to pre-COVID levels; second, improved discretionary spending in key states for Collins, such as Queensland and Western Australia, along with the potential for greater digital sales penetration; and third, the scaling of KFC’s presence in the Netherlands, which is expected to enhance long-term margins for KFC Europe.
In its HY25 earnings, Collins Foods Limited (CKF.AX) posted revenue of $703.5 million, up from $695.2 million in the same period last year. The company ended the year with 386 restaurants, up from 374 in the prior year period. It reported net debt of $158.9 million, a decrease of $14.1 million, driven by strong cash flows that facilitated the reduction in debt and enhanced its investment capacity. Net operating cash flow remained robust at $75.3 million, although it was lower compared to the previous year due to a decline in EBITDA. Despite this, the company achieved a strong cash conversion rate of 108%. Its net cash flow came in at $4.6 million.
Collins Foods Limited (CKF.AX) currently offers a fully franked interim dividend of $0.11 per share and has a dividend yield of 3.61%, as of December 25.
7. Premier Investments Limited (PMV.AX)
Dividend Yield as of December 25: 4.09%
Premier Investments Limited (PMV.AX) ranks seventh on our list of the best ASX dividend stocks. The company is mainly engaged in retail and investment activities. The company owns the Peter Alexander and Smiggle brands, which analysts believe have significant potential for long-term growth. They are also optimistic about the proposed sale of the company’s non-core brands.
Bell Potter, a prominent Australian stockbroking firm, noted that Premier Investments Limited (PMV.AX) holds around 6% market share in the Australian apparel sector and about 15% in the stationery market. In addition, Smiggle is a major player in the UK market. With plans to expand Smiggle’s presence in the Middle East and Indonesia through a low-risk wholesale model, along with Peter Alexander’s expansion into the UK, both brands are seen as having considerable growth opportunities ahead. The stock has surged by nearly 19% in the past 12 months.
In its earnings report, Premier Investments Limited (PMV.AX) highlighted that FY24 proved to be another challenging year for discretionary retail. Despite the difficult market conditions, the company achieved global sales of $1.6 billion, reflecting a 25.5% increase compared to pre-COVID FY19 levels. The company also posted a strong EBIT result of $325.9 million, driven by effective management of gross margins and operational costs. In August 2023, the Premier Board initiated a strategic review of Premier Retail, recognizing significant growth opportunities for Peter Alexander, Smiggle, and the Apparel Brands. In June 2024, the Board concluded that the proposed merger of the Apparel Brands business with Myer warranted further evaluation, and extensive work has been carried out to analyze this proposal.
Premier Investments Limited (PMV.AX) declared a record final fully franked ordinary dividend of $0.70 per share, marking a 16.7% increase or an additional 10 cents per share compared to the FY23 ordinary dividend. This brings the total fully franked ordinary dividend for FY24 to $0.133 per share. As of December 25, the stock supports a dividend yield of 4.09%.
6. Super Retail Group Limited (SUL.AX)
Dividend Yield as of December 25: 4.40%
Super Retail Group Limited (SUL.AX) is an Australian retail company that operates a range of well-known brands across different sectors, including outdoor recreation, sports, and auto parts. Analysts consider the stock attractive due to its low valuation and the potential for increased sales and productivity. They pointed out that Super Retail Group is one of the few retailers in Australia with both space and sales productivity levers, which they expect the company to effectively utilize.
Super Retail Group Limited (SUL.AX) celebrated its 20th anniversary as a public company in the 2024 financial year, marking the occasion with the opening of its 750th store, another record sales performance, and total annual shareholder returns (including dividends) of 30%. Despite persistently high inflation and escalating cost-of-living pressures that influenced consumer shopping priorities, particularly regarding discretionary purchases, the company navigated the challenging macroeconomic environment successfully. In addition, it delivered strong financial results, with higher sales and gross margins, demonstrating the resilience and adaptability of its Supercheap Auto, rebel, BCF, and Macpac brands. Total sales for FY24 rose by 2% to $3.9 billion, driven by network expansion and continued strong growth in online sales.
Super Retail Group Limited (SUL.AX) also showed a strong cash position in FY24. The company ended the year with a net cash position of $218 million, compared with $192 million in the same period last year. Its operating cash flow for the year came in at $635 million. Moreover, cash receipts from customers rose by $91 million due to increased sales.
In its earnings call, Super Retail Group Limited (SUL.AX) announced that the board decided to pay a fully franked final ordinary dividend of $0.37 per share, which is near the top end of the company’s dividend payout policy. In addition to this, shareholders will receive a fully franked special dividend of $0.50 per share. Along with the interim ordinary dividend of $0.32 per share, shareholders will receive total dividends of $0.119 per share for FY24. With a dividend yield of 4.40% as of December 25, SUL is one of the best dividend stocks on our list.
5. Nick Scali Limited (NCK.AX)
Dividend Yield as of December 25: 4.50%
Nick Scali Limited (NCK.AX) is a retailer that specializes in premium furniture. It designs, imports, and sells a wide range of high-quality furniture, including sofas, chairs, tables, and home décor items. The company, established more than 60 years ago, has grown into one of Australia’s largest retailers and importers of high-quality furniture. The company remains committed to expanding its success while honoring the legacy of its founder. Each year, Nick Scali Furniture imports over 5,000 containers of premium leather and fabric lounges, along with dining and occasional furniture. In the past 12 months, the stock has delivered a 23% return to shareholders.
In FY24, Nick Scali Limited (NCK.AX) reported strong earnings. The company’s revenue of A$468.2 million, down 7.8% from the same period last year. However, Australian and New Zealand (ANZ) written sales orders totaled $447.4 million, reflecting a 2.4% increase compared to FY23. The gross margin for the ANZ region reached 66.0%, which was a 2.5% improvement over the previous year. The company also completed the acquisition of Fabb Furniture in the UK on May 8. This acquisition resulted in the addition of 20 stores to the company’s network. As of June 30, 2024, cash and bank deposits amounted to $111.3 million.
As a dividend payer, Nick Scali Limited (NCK.AX) has a solid cash position. In FY24, the company generated $87.1 million in cash from operating activities, after accounting for operating lease and interest payments, compared to $89.8 million in FY23. Property and other capital investments totaled $28.1 million, up from $12.9 million in FY23. This included $16.6 million for construction and $2.4 million for the fit-out of a new distribution center in Queensland. The directors declared a fully franked final dividend of $0.33 per share. Including the interim dividend, this results in a payout ratio of 69% for FY24, compared to 60% in FY23.
Nick Scali Limited (NCK.AX) is one of the best dividend stocks on our list as the stock supports a dividend yield of 4.50%, as of December 25.
4. Amcor plc (NYSE:AMCR)
Dividend Yield as of December 25: 5.37%
Amcor plc (NYSE:AMCR) ranks fourth on our list of the best ASX dividend stocks. The Victoria-based packaging company offers a wide range of related products for different industries. In fiscal Q1 2025, the company generated revenue of $3.35 billion, a slight decline of 2.6% compared to the same period the previous year. Despite this, the company started fiscal 2025 on a positive note, benefiting from improved volume growth and stronger customer demand. Adjusted earnings per share rose by 5%, with contributions from both the Flexibles and Rigid Packaging segments. This growth was driven by sequential volume increases and a continued focus on cost management and preserving margin strength.
Amcor plc (NYSE:AMCR) has announced plans to acquire its US competitor, Berry Global, through an all-stock deal valued at $8.43 billion. The merger will position the combined entity as a leading force in the consumer and healthcare packaging sector, with total revenues of $24 billion. This decision follows a wave of industry consolidation driven by declining demand for packaging materials, which had spiked during the pandemic’s e-commerce boom. The acquisition represents Amcor’s largest deal to date. Previously, in 2019, the company acquired US-based Bemis for $5.25 billion in an all-stock transaction, a deal that required the divestiture of three manufacturing facilities to gain approval from the US Justice Department.
On November 1, Amcor plc (NYSE:AMCR) announced a 2% increase in its quarterly dividend, raising it to $0.1275 per share. This marks the 41st consecutive year of dividend growth for the company. As of December 25, the stock supports a dividend yield of 5.37%.
At the end of Q3 2024, 18 hedge funds tracked by Insider Monkey held stakes in Amcor plc (NYSE:AMCR), compared with 21 in the previous quarter. These stakes have a consolidated value of $185.3 million.
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.
2. APA Group (APA.AX)
Dividend Yield as of December 25: 6.67%
APA Group (APA.AX) is an Australian infrastructure business company, headquartered in New South Wales. The company mainly owns and operates natural gas and electricity assets. It manages a diverse range of energy assets, including a vast national gas pipeline network, gas processing plants, gas-fired power generation facilities, solar and wind farms, and electricity transmission infrastructure. Notably, it is responsible for transporting half of the country’s total gas consumption.
InFY24, APA Group (APA.AX) reported revenue of $2.6 billion, up 8% from the same period last year. This revenue growth was fueled by strong performance in Energy Infrastructure, a full-year contribution from Basslink, and the initial impact of the new Pilbara Energy System. The Pilbara business is delivering results consistent with the expectations set during its acquisition.
In addition, APA Group (APA.AX) also showed a strong cash position. The company generated $1.07 billion in free cash flow, up 0.3% from the prior-year period. Its total assets amounted to $19.5 billion, growing by 23.3% from the same period last year.
APA Group (APA.AX)’s strong performance allowed the Board to declare a final distribution of 29.5 cents per security, bringing the total FY24 distribution to 56.0 cents, aligning with prior guidance. This marks a 1.8% increase compared to FY23. This achievement was made alongside continued investments in new infrastructure to ensure safe and reliable operations while advancing significant growth initiatives. It is one of the best dividend stocks on our list as the company has been rewarding shareholders with growing dividends for the past 20 years. The stock has a dividend yield of 6.67%, as of December 25.
1. Centuria Office REIT (COF.AX)
Dividend Yield as of December 25: 9.65%
Centuria Office REIT (COF.AX) is a real estate investment trust (REIT) company that invests in office buildings. The office segment within the REIT industry has faced significant challenges, as high interest rates have impacted rental income and office property values. Furthermore, the rise of remote work due to the COVID-19 pandemic has led to a decline in overall demand for office space. Due to these reasons, COF has been down by over 14.5% in 2024. However, analysts are presenting a positive outlook for the stock.
With Centuria Office REIT (COF.AX) currently valued at a significantly low price, near its 52-week low, its distribution yield has risen, which could attract some investors. While passive income shouldn’t be the sole focus for investors, it can still be a key factor in overall returns. The company has announced a distribution of 10.1 cents per unit for FY25, offering a forward distribution yield of 9.1%. This yield alone could potentially outperform the benchmark return in 2025.
In addition, the high interest rate environment has posed a major challenge for the REIT sector, which is why many REITs are currently trading close to their 52-week lows. However, a potential rate cut or two from the Reserve Bank of Australia (RBA) could help revive the sector, including the Centuria Office REIT (COF.AX). While it’s uncertain when this might happen, the RBA’s December statement indicated progress in controlling inflation in Australia.
Centuria Office REIT (COF.AX) is one of the best dividend stocks on our list as the stock supports a dividend yield of 9.65%, as of December 25.
Overall, Centuria Office REIT (COF.AX) ranks first on our list of the best ASX dividend stocks to buy. While we acknowledge the potential for COF to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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