3 ASX Dividend Stocks Yielding Up To 4.2%

As the Australian market grapples with global uncertainties and fluctuating commodity prices, investors are increasingly seeking stability amidst the volatility. In such an environment, dividend stocks can offer a reliable income stream, making them an attractive option for those looking to balance their portfolios while navigating current market conditions.

Top 10 Dividend Stocks In Australia

Click here to see the full list of 34 stocks from our Top ASX Dividend Stocks screener.

Let’s take a closer look at a couple of our picks from the screened companies.

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Commonwealth Bank of Australia offers retail and commercial banking services across Australia, New Zealand, and internationally, with a market cap of A$268.78 billion.

Operations: Commonwealth Bank of Australia’s revenue segments include Retail Banking Services (including Bankwest) at A$13.08 billion, Business Banking at A$9.25 billion, New Zealand operations at A$3.03 billion, and Institutional Banking and Markets at A$2.90 billion.

Dividend Yield: 3.1%

Commonwealth Bank of Australia offers a dividend yield of 3.08%, which is lower than the top 25% in the Australian market. Despite a payout ratio of 79.6% indicating dividends are covered by earnings, its dividend history has been volatile over the past decade. Recent fixed-income offerings, including A$1.75 billion bonds due in 2029, suggest a focus on debt management and funding strategies that could impact future dividend stability and growth potential for investors.

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: CSL Limited is a biopharmaceutical company involved in the research, development, manufacture, marketing, and distribution of products and vaccines globally, with a market cap of A$46.70 billion.

Operations: CSL Limited’s revenue is primarily derived from its CSL Behring segment, which includes CSL Intellectual Property, generating $10.87 billion, followed by CSL Vifor at $2.39 billion and CSL Seqirus at $2.15 billion.

Dividend Yield: 4.2%

CSL’s dividend yield of 4.24% is below the top 25% in Australia and not well covered by earnings, with a high payout ratio of 101.2%. However, dividends have been stable and growing over the past decade, backed by cash flows with a cash payout ratio of 57.1%. Despite recent profit margin declines to 9.1%, CSL’s expansion in Kankakee aims to enhance production capacity and could support future earnings growth, potentially impacting its dividend sustainability positively.

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Northern Star Resources Limited is involved in the exploration, development, mining, and processing of gold deposits with a market capitalization of A$28.58 billion.

Operations: Northern Star Resources Limited generates revenue primarily from its gold operations at KCGM (A$1.94 billion), Pogo (A$1.20 billion), Jundee (A$1.06 billion), Kalgoorlie (A$736.50 million), Carosue Dam (A$1.03 billion), and Thunderbox & Bronzewing (A$992.40 million).

Dividend Yield: 3%

Northern Star Resources’ dividend yield of 3% is below the top 25% in Australia and not well covered by cash flows, indicated by a high cash payout ratio of 448.6%. However, dividends have been stable and growing over the past decade. The company recently announced a A$500 million share buyback program, potentially indicating confidence in its financial position despite current dividend coverage challenges. Trading at 36% below estimated fair value may offer some appeal to investors.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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