3 Top High Rated ASX Dividend Stocks To Buy
The Australian share market looks set to start the week on a subdued note. The ASX 200 is expected to end the day a few points lower. This follows a soft end to the week on Wall Street. Hence, the Dow Jones edged slightly lower. The S&P 500 fall 0.2%, and the Nasdaq drop 0.5% on Friday.
Our List of ASX Dividend Stocks Of 2021
If you are an income investor on the lookout for new additions to your portfolio, check out the shares listed below. During this period of uncertainty, it might be wise to consider dividend stocks. These top companies provide above-average yields in the coming years. Here is what you need to know about these dividend shares:
BHP Group (ASX: BHP)
BHP Group is arguably the most well-diversified mining and exploration company there is, and it is a part of every investor’s portfolio for different reasons – maybe for the stable dividends, or to decrease the overall volatility of the portfolio.
However, the BHP share price has come under significant pressure this month. BHP shares are down 7.6% since last month and are trading at $38 at the moment of writing. This means that BHP’s shares are now down by almost 10.5% year-to-date. What happened? One of the causes is further weakness in the iron ore price after curtailed steel production in China hit demand for the base metal. Not only BHP experienced such a pullback, but other mining giants went also through the same ride.
China, which is the world’s second-largest economy is aiming to cut steel output growth this year to 2020 levels. Although, after expanding around 12% in the first half of this year, the country is now reducing its steel output by 12.2% from August to December to reach its goal. However, we remain optimistic about the rebound of iron ore prices driven by a return in demand by the end of the first quarter of 2022.
The falling BHP shares were keeping the Australian market lower while investors could not shirk concerns about the troubled property giant Evergrande. The ASX has bucked a good lead from the US as investors look for confirmation that Evergrande paid a $US83.5 million interest payment on Thursday. Evergrande pledged it would. Although some investors say they are yet to see the evidence. The Chinese giant is struggling to pay about $418 billion in debts and investors fear a collapse could reverberate around the world.
Despite the recent event, BHP remains a solid play, especially for its lucrative dividend of US$ 3.01 per share representing a solid payout ratio of 89%. The record dividend was the result of operational excellence throughout the year. BHP exhibited solid performance that led to consistent free cash flow generation and an efficient margin of 64%.
Origin Energy (ASX: ORG)
From electricity, natural gas to solar and LPG, Origin Energy is a leading provider of energy throughout Australia. It is an integrated company with key operating segments that include exploration, production, generation, and renewable energy.
The Origin Energy share price continue to skyrocket since last week despite the broad market volatility. At the time of writing, it is trading at $5.07 per share. What moves ORG share price since late September? Thus, since the last month, Origin has appreciated not less than 13%. This happened as the company announced a positive update regarding its UK investment in Octopus Energy.
Origin strategically invested a total of $507 million into Octopus last year, earning it a 20% stake in the UK energy retailer. This was on a valuation of around $2.5 billion at the time.
The recent release revealed that Octopus Energy has received a GBP 211 million investment from Generation Investment Management, a sustainable investment manager. As a result, Origin has announced it will be adding up an additional GBP 38 million in Octopus to maintain its 20% equity stake. So essentially, Origin must pay up to keep the gains coming in from Octopus.
Since Origin’s initial investment in Octopus, the position has grown in value to $1.1 billion. Hence, a lucrative 92% return in a relatively short time.
Apart from a stock that has recently gained momentum, Origin is offering an amazing dividend yield of 3.94%.
Suncorp Group Limited (ASX: SUN)
The Suncorp share price has recently gained following the in-demand notes offering. Hence, a trade you might consider as SUN shares has rebounded since last month. At the moment of writing, Suncorp is trading at $12.77 per share, up by an impressive 31% year-to-date.
Suncorp is one of Australia’s largest financial services brands. The company is based in Queensland. Suncorp offers retail and business banking, general insurance, life insurance, superannuation and investment products in Australia and New Zealand.
So, what recently pushed the SUN share price higher? The Suncorp share price exhibits a solid positive momentum after the company successfully completed a $405 million capital raise in late September. The capital raise was increased from $375 million following strong demand. It saw Suncorp providing capital notes 4 for $100 apiece.
The capital notes 4 first distribution will be at a rate of around 2.9%. Then, it will be paid on 17 December 2021. From then on, the notes will come with a distribution rate of around 2.04% per annum. Suncorp plans to hand out fully franked distributions.
Today’s 0.63% gains have added to the Suncorp share price’s recent strong performance on the ASX.