5 Best Dividend Stocks to Buy [ASX Blue Chip Stocks 2023]

Dividend stocks to buy

Henry Fung

Henry is a co-founder of MF & Co. Asset Management with over 19 years of experience as a trader, investor and asset manager. Henry is the instructor of the Professional Trading Course, which is a free 5-day course on how to become a profitable trader.

May 1, 2023

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Today, we’ll look at some blue chip stocks which are some of the best dividend stocks to buy on the ASX for 2023.

Most of these shares are already mature stocks with stable revenue and paying good dividends.

As defensive stocks, value stocks are considered a safe harbour for assets as strong established businesses are expected to weather any oncoming storms.

In addition, any rise in interest rates from inflation fears will see value stocks perform well as investors rotate out from growth stocks into value stocks.

There are three reasons for this:

  • growth stocks love low yields, which gives them a higher future value;
  • value stocks love higher yields and inflation as value stocks tend to be price setters;
  • investors look for dividend yield to beat inflation.

Even though COVID-19 has disrupted pretty much all of these companies, these are all strong resilient blue chip stocks that are poised to bounce back, if not already.

Some of these stocks don’t have a great yield right now.

However, what is more important is that these blue chip stocks all have strong growing dividends and the yields will rise over time.

If you are looking to buy Australian blue chip stocks for the long-term and looking for a strong stable dividend yield, these are some of the best dividend stocks to buy on the ASX for 2023.

If you are looking for higher growth shares, you can check out our list of 5 best growth shares here.

For higher risk, we have a list of 5 best penny stocks that have good potential.

Best Dividend Stocks To Buy Now

The hardest part when it comes to dividend investing 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.

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Our Research team has been hard at work finding the best dividend stocks to buy now in Australia for dividend investing.

I’ve outlined 5 stocks that we feel represent some of the best dividend stocks in the Australian market.

Best Dividend Stocks on the ASX with a Good Yield

These blue chip stocks currently have a good yield and good yield growth prospects.

Fortescue Metals (ASX:FMG)

Fortescue Metals (ASX:FMG)

Fortescue Metals Group is a pure-play iron ore producer with the fourth-largest capacity in the world. The company is also morphing into a leader in mining decarbonisation and green hydrogen through its Fortescue Future Industries subsidiary. FMG hit a rough patch after China’s property sector landed in a debt crisis and iron ore prices slumped from their 2021 highs.

Despite depressed prices and slowing demand from China’s zero-Covid policy, FMG continued record production and despatch in the nine months ended March 2023.

The stock has faced selling pressure after the latest quarterly update with investors fearing a further decline in iron ore prices.

With the recent decline, FMG is currently yielding about 9.33%.

Read more about why we think Fortescue Metals (ASX:FMG) is one of the best dividend stocks on the ASX.

Mineral Resources (ASX:MIN)

Mineral Resources Ltd (ASX:MIN)

Mineral Resources Ltd. is a large, integrated Australian mining company with a significant market presence in four businesses.

These are mining services, iron ore, lithium, and energy.

The company has also recently progressed its establishment of integrated port and marine infrastructure facilities and taken control of the largest on-shore gas discovery in Australia through the Norwest Energy acquisition.

It has four major divisions: CSI Mining Services, where the company is a contract service provider for mines owned by other companies; MINRES Lithium and MINRES Iron, where the company is an owner, producer, and processor of iron ore and lithium products through Joint Ventures and complete ownership; and MINRES Energy, the company’s natural gas division that owns a production site to provide stable and emission-free energy to its client and own production sites.

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Mineral Resources is:

  • The world’s largest crushing contractor
  • A leading pit-to-port mining services provider
  • A top five lithium producer – globally
  • A top five iron producer – globally
  • The largest landholder of gas acreage in Perth and Carnarvon basins

Mineral Resources is forecasted to pay a 4% dividend yield.

Read the full article on why we think Mineral Resources (ASX:MIN) is one of the best dividend stocks to buy on the ASX.

Coronado Global Resources (ASX:CRN)

Coronado Global Resources ASX CRN

Coronado Global Resources (ASX:CRN) is one of the world’s largest coal producers with a product mix serving the steel market.

The company has been a big beneficiary of the equities market’s de-risking from high-growth technology towards defensive value, as well as the recent inflation in commodities prices.

With a strong fundamental and economic base, the company has been able to capitalize well on cyclical opportunities and become highly profitable and a market favourite.

The stock currently pays around 5% which is fairly high in the current environment.

Read our research on Coronado Global Resources (ASX:CRN) on why we think it’s one of the best dividend stocks to buy on the ASX. 

Rio Tino (ASX:RIO)

Rio Tinto is a global mining and metals company with operations spanning 35 countries. Its organisational structure is built around its four major products, namely Iron Ore, Copper, Aluminium, and Minerals.

The company, which was founded in 1873, is a global leader in the production of iron ore, copper, and aluminum, while its Minerals business includes iron ore pellets and concentrate, titanium dioxide, borates, diamonds, and certain critical minerals derived from the processing of mining waste and by-products.

RIO’s shares are dual-listed on the London Stock Exchange and the ASX, while American depositary shares are traded on the New York Stock Exchange.

RIO currently pays a dividend yield of 8%.

Read the full article about why Rio Tinto (ASX:RIO) is one of the best dividend stocks to buy on the ASX.

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Scentre Group (ASX:SCG)

Scentre Group (ASX: SCG)

Scentre Group is one of Australia’s largest operators of large-scale retail centers.

The company houses some of the country’s biggest brands across multiple formats such as supermarkets and high-end specialty retail.

Though the pandemic ravaged footfalls, demand is bouncing back strongly.

Meanwhile, the company is well capitalized and on track for growth via a new strategy and a robust development pipeline.

At the current SCG share price, Scentre Group shares have a market cap of A$14.6 billion and offers a dividend yield of 5.24%.

Read our research on Scentre Group (ASX:SCG) on why we think it’s one of the best dividend stocks to buy on the ASX. 

Bonus Stock: Best Dividend Stocks on the ASX with Growing Dividends

These blue chip stocks currently have a relatively low dividend yield but have strong dividend growth. You should expect the yield to catch up in the near future.

Deterra Royalties (ASX:DRR)

Deterra Royalties (ASX:DTR)

Deterra Royalties (ASX:DRR), the largest ASX-listed resources-focused royalty company, is the result of a demerger in 2020 from Iluka Resources, Australia’s biggest mineral sands company.

The company earns mining royalties from its flagship Mining Area C (MAC), the site of BHP’s North Flank and new South Flank project.

Listed royalty companies such as Deterra provide investors with exposure to the value from a natural resources business, but without much of the exposure to some of the operating risks of their mining.

The demerger was fortuitously timed considering the recent rally in ore prices and the inauguration of BHP’s South Flank at the company’s flagship Mining Area C (MAC).

The latter will cause a sizeable jump in royalty flows to Deterra.

Once MAC ramps up to its expected output by FY23, DRR at the current share price will have a forecasted PE of 12.5x and a dividend yield of 5.3%.

Click here for the full article on Deterra Royalties (ASX:DRR) and why we think it’s one of the best dividend stocks to buy.

Are you looking for more stocks to buy? In our opinion, buying the right stock at the right time is just half the battle – knowing how to manage the position and risk is just as, if not more important. Take our free 5-day trade like a professional course, it give you the foundational knowledge required to become a profitable trader.

This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.

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