The Motley Fool

Are these alternative ASX banking shares the best dividend stocks for yield?

There are alternative ASX banking shares that could provide a good dividend yield.

It’s true that Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) all offer good potential dividend yields, but they aren’t the only ones that could be considered. And the big four banks are all quite similar. 

The second-tier banks also could be options to think about.

Look at Bank of Queensland Limited (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN), MyState Ltd (ASX: MYS) and Suncorp Group Ltd (ASX: SUN).

BOQ has a grossed-up dividend yield of 11%.

Bendigo Bank has a grossed-up dividend yield of 8.7%.

MyState has a grossed-up dividend yield of 8.8%.

Suncorp has a grossed-up dividend yield of around 7% excluding special dividends.

As you can see, these yields are on par with the yields offered by the big banks and arguably are less at risk of being cut like we saw from NAB because the regional banks haven’t faced the same amount of customer remediation relating to financial advice as the big banks.

Also, they seem to be under less pressure to increase their capital levels, particularly as they don’t have large New Zealand subsidiaries like the big four ASX banks. The Reserve Bank of New Zealand (RBNZ) wants the big ASX banks to hold more capital.

If you were to invest in Suncorp then you’d also be getting exposure to the insurance business, so for that reason I don’t think I would want to invest in it.

With the remaining choices you’re getting a larger exposure to either Queensland, Tasmania or Victoria & South Australia.

Foolish takeaway

Thinking about those state exposures I’d put Tasmania top, meaning I prefer MyState, but I think BOQ and Bendigo Bank are both worthy contenders too for dividends.

But if you’re after quality dividend shares then these top ASX shares could be precisely what you’re looking for your portfolio.

3 Top-Quality ASX Dividend Picks For Income

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of MyState Limited and National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.