High Dividend Stocks & Shares on ASX

High Dividend Stocks ASX

Investing in high dividends stocks can help you generate a long-term source of income. The nature of this investment could help secure financial independence – giving you peace of mind for the future.

With the help of Lincoln Indicators, you can invest with confidence, control and peace of mind. Or, we can take the headache out of the investing process with our Managed Funds. With our proprietary methodology, we invest in financially healthy stocks that may meet an investor’s long-term growth or income (dividend) objectives.

What Are Dividends?

Dividends are a distribution of profits made by a company to its shareholders. It is a token of reward paid to the shareholders for investing in the company.

Generally, a stock is a portion of the business that is open for the public to purchase– it confers ownership to the one who has bought it and, consequently, a right to derive a dividend should the company pay one.

It’s important to note that not all stocks pay dividends.

Dividends can come in various forms. Among the various types of dividends available, the cash dividend is the most common. Others include stock dividends, asset dividends, and special dividends.

Investing in High Yield ASX Dividend Stocks

When interest rates are low, the search for a high-yielding dividend-paying company increases. Investing in a high-return dividend company or stock can help investors obtain a long-term income.

In most cases, investors with little experience tend to simply compare dividends and buy the stock with the highest dividends. If investments are successful over the long haul, your decisions must be based on logic over sentiment. It is simply not enough to compare dividends and buy the stock with the highest return.

To ensure consistent high-performing returns, we need to conduct due diligence and look at a business’s financial statements. By applying Lincoln Indicators’ proprietary quantitative methodology, we can determine the financial health of a company and the level of risk vs. reward over time, not just in the moment.

By looking through the financials of the 2,000 stocks listed on the ASX, our quantitative analysis can rapidly eliminate around 75% of stocks deemed a high-risk investment.

Not only does our quantitative methodology weed out risky investments, but it also highlights hidden gem stocks that aren’t on the radar, sitting outside the high profile ASX200 list. Our approach has consistently delivered strong risk-adjusted returns that protect against downside volatility.

Read more about our investment process here.

Evaluating the Financial Health of High Dividend Stocks on the ASX

Determining the prospect of a high dividend stock requires analysing dividend stock ratios. Analysts and investors use dividend stock ratios to determine the dividends a company might payout in the future and for how long.

Lincoln Indicators’ Australian Income Fund takes the headache out of the equation to deliver an income stream over the long-term.

For investors who prefer to manage their own investments, we have Stock Doctor, an industry-leading stock portfolio management software. That provides our clients with accurate analysis to guide them when making an investment decision.

Here are some vital dividend stock ratios that must be considered:

1. Dividend Payout Ratio

The dividend payout ratio is popularly used in determining how safe a company’s dividend is and the tendency for appreciation in the future. The dividend payout of an organisation can be obtained by dividing the number of dividends it has paid over a particular period by the number of earnings generated.

For instance, if a company has a payout ratio of 50% over a year, the company could have paid 5 dollars per share in dividends while earning about 10 dollars per share. In some cases investing in companies with a payout ratio above 60% could be risky.

It is because when these organisations experience financial issues, it becomes difficult to continue paying dividends. However, if the earnings growth is strong, a company with a high dividend payout ratio will maintain the dividend payment.

2. Free Cash Flow

Cash flow is a key metric when determining the sustainability of a business. An organisation without a free cash flow might run into problems in the future. Free cash flow is obtained by subtracting a company’s expenditure from its total income. When a company has little or no cash flow, it becomes difficult to reward shareholders.

3. Return on Invested Capital

High return on investments is another factor to consider when evaluating high dividend stocks. The higher the return on equity, the better for you. It means that your invested dollars are earning a higher rate of return and can provide a greater reward when other investments might not be as profitable or risky.

4. Operating Profit Margin

The operating profit margin of a company is another critical area to consider when trying to determine if a company indeed can maintain a high-yield dividend. Basically, financial operating margin refers to the income realised before interests and taxes. A high and stable profit margin is a sign of significant financial growth. Companies with a high operating profit margin can maintain stable, sustainable and reliable cash flow. In other words – good news for shareholders!

Why do Australian Investors Choose Lincoln Indicators for High Dividend Stocks?

There are several reasons why Australian investors choose Lincoln Indicators. We’ve listed a few below:

  • Strategy Based on Fact

We base our strategy on quantitative analysis and financial know-how to determine the level of risk vs. reward over time, not just in the moment.

  • We Invest in the Numbers

Lincoln Indicators base every investment decision on quantifiable data analytics that looks at the most crucial stock/business share metrics. It means your investments are based on fact, not opinion.

  • Team of Financial Experts

Several Australian investors prefer to do business with us because we bring solid technical expertise and in-depth knowledge onboard. Our professionals understand the ins and out of the stock market and are accessible.

  • Exceptional Results

Since 2012, Stock Doctor’s Star Income Stocks has helped Australian investors grow their wealth by providing a research platform to identify financially healthy stocks that may meet their income objectives.

To start investing in quality income stocks via either our managed funds option or our renowned Stock Doctor research tool, simply get in touch with a member of our team on 1300 676 333 or enquiries@lincolnindicators.com.au.

Contact Lincoln Indicators

Investing in the stock market can be a difficult decision, but it becomes even more complicated when you don’t know what to look for. There are so many shares available and each with different risks associated with them; how do we know which one will give us our best return on investment? Contact Lincoln Indicators today and let us guide you on the pathway towards financial security!


Important information

The Investment Manager for the Lincoln Australian Growth Fund, Lincoln Australian Income Fund, Lincoln U.S. Growth Fund Hedged and Lincoln U.S. Growth Fund Unhedged (the Funds) is Lincoln Indicators Pty Ltd (Lincoln Indicators) ABN 23 006 715 573 as Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167 (Lincoln Financial). Equity Trustees Limited (Equity Trustees) ABN 46 004 031 298, AFSL 240975 is the Responsible Entity for the Funds. Equity Trustees is a subsidiary of EQT Holdings Limited ABN 22 607 797 615, a publicly listed company on the Australian Securities Exchange (ASX: EQT).

This communication has been prepared by Lincoln Indicators, as Corporate Authorised Representative of Lincoln Financial, to provide you with general information only. In preparing this communication we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Lincoln Indicators, Lincoln Financial, Equity Trustees nor any of their related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of our Financial Services Guide and the Product Disclosure Statements before making a decision about whether to invest in these products.

The Fund’s Target Market Determination is available here. A Target Market Determination is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.

Invest in the numbers yourself with Stock Doctor.

Copyright © 2024 Lincoln Indicators Pty Ltd. All rights reserved.

All financial services are provided by Lincoln Indicators Pty Ltd ABN 23 006 715 573 (Lincoln) as the Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167.

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