If you are entering a stage where you are looking for stocks that pay a strong, reliable and predictable dividend, the best place to look is for companies that are mature and dominant in their field. If you are looking to buy these stocks for the long term, these are some of the best dividend stocks to buy now on the ASX in 2018.
However, if you want to time the market and maximise your dividend yield by purchasing these stocks when they are oversold, check out our article here on how to buy income stocks using technical analysis. 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.
Research Is Key To Finding The Best Dividend Stocks To Buy Now
The hardest part when it comes to finding a good dividend stock 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 and I’ve outlined 5 stocks that we feel represent some of the best value in the Australian market.
IPH Limited (ASX IPH) – IPH is an intellectual property company with a number of independent professional businesses. IPH shares are well positioned to take advantage of the globalisation trend in the legal services industry with growth coming from global acquisitions. IPH acquires mature companies with strong revenues so not only do you get a strong predictable revenue and yield, they are also growing. IPH is currently paying about 6.39% and is stable.
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. CSR is currently paying about 7.35% in dividend and has a one-year dividend growth of 18.92%
Sims Metal Management (ASX SGM) – Sims Metal Management Limited (ASX SGM) is the leading metals and electronics recycling company in the world. The company has streamlined its operations and built a reliable supply chain by integrating complementary firms. Sims grows by global acquisitions and is in a growing industry with sustainability and recycling coming into focus worldwide. Even though Sims dividend yield is lower at 4.31%, they have grown their dividend yield by 56.25% in the past year. Continued growth in the dividend will see the yield grow quickly.
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. AGL has paid a massive dividend yield of 12.72% in the past year and one year dividend growth was 165.50%. 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 will divest their Coles business, which is both very good management decisions and has led to a rally in their share price. Wesfarmers currently pays about 6.49% in dividend and has a one year dividend growth of 12.63%.
Make Your Money Work Harder For You
Picking the best dividend stocks to buy now, timing the entry and having an edge in the market is not easy. Our goal at MF & Co. is to make this process more accessible and easier for our clients. Download our special report below for another 5 best shares to buy now which comes with a special strategy that we use for our clients that can generate additional income over your existing dividend or growth shares.
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Henry is a co-founder of MF & Co. Asset Management with over 12 years experience as a trader, investor and asset manager. Henry’s focus is on High Net Worth Wealth Management and using algorithmic quantitative trading systems to invest for his clients. Henry also trains new Interns and Advisers on trading and risk management.