Income investors are always on the hunt for high-yielding shares. However, high yields don’t necessarily mean high overall returns. For example, sometimes high-dividend stocks can be misleading because of their high yield but depressed share price; this is known as a ‘fallen angel’. Regardless of how you look at them, we have put together a list of the 5 highest-yielding ASX 200 stocks based on dividend yield.
Perhaps to no one’s surprise, iron ore producers feature heavily in the highest yielding stocks in the S&P/ASX 200 Index (ASX: XJO). This is a product of mainly two predominant factors that have played out over the past year. Firstly, the soaring price of the steelmaking commodity in the first half of the year. Secondly — ironically — is the tumbling price of the same commodity since July.
We’ll cover this in more detail shortly, but now, let’s dive into the highest yielding stocks in the ASX 200.
High yielding ASX dividend stocks
Cromwell Property Group (ASX: CMW)
The first cab off the ranks is diversified real estate investor and manager, Cromwell Property Group. Some background on Cromwell — it holds nearly $12 billion in assets under management, with over 2,700 tenant customers. These property assets are spread across 15 countries with the majority of the spaces leased as office spaces.
At the time of writing, Cromwell offers a dividend yield of 8.2% based on the dividend payments made over the last 12 months. The annual dividend per share (DPS) has been declining since 2018, while the dividend yield has stayed between the 6% to 9% range. This is due to the fall in the Cromwell Property share price in recent times, which inflates the dividend yield.
BHP Group Ltd (ASX: BHP)
Next on the list of the highest yielding dividend stocks in the ASX 200 is Australia’s third-largest listed company, BHP.
A booming period for commodities meant the diversified miner experienced a bumper year for profits. In turn, the company unleashed a dividend bonanza on its shareholders. The increase in dividends paid out to shareholders increased ~150% year on year, bringing the dividend yield to 10.5%.
However, it is worth noting that this yielding has increased with the BHP share price collapsing ~30% from its highs on the back of the falling iron ore price.
AGL Energy Limited (ASX: AGL)
Another victim of declining DPS and surging yields is one of Australia’s oldest companies, AGL Energy. It seems the $4 billion electricity and gas provider couldn’t catch a break in the last 12 months as additional costs stacked higher and higher. Provisions for out-of-the-money renewable power-purchasing contracts and restoration of generations sites pulled AGL down to a $2.06 billion loss in FY21.
Despite the catastrophe, the company paid a total of 65 cents per share in dividends over the past year. Based on the current AGL share price, that equates to a dividend yield of 10.6%. Once again, this yield is boosted by the company’s share price tumbling 54.3% during the payment of those dividends.
Rio Tinto Limited (ASX: RIO)
That brings us to the second-highest yielding dividend stock in the ASX 200, Rio Tinto. Once again, following a common thematic of the cash-heavy iron ore producers, Rio Tinto has gone on a dividend splurge over the past 12 months.
With profits ballooning to US$18.8 billion, up from US$7.2 billion in the prior year, the mining giant had plenty of ammo to distribute large payouts to shareholders over the past 12 months. As a result, the company’s DPS for the last year stands at US$9.312. This equates to a dividend yield of 13% based on the current Rio Tinto share price.
Fortescue Metals Group Limited (ASX: FMG)
Finally, the highest yielding dividend stock in the ASX 200 is the fast-growing Aussie iron ore producer, Fortescue Metals.
Benefitting from the soaring iron ore prices in the first half of the year, the company chaired by Andrew ‘Twiggy’ Forrest grew its earnings by more than double the previous year. As a result, the company decided to increase dividends by a similar proportion, rising from US$1.403 to US$3.035 in the space of 12 months.
Unfortunately for shareholders, the Fortescue share price was the hardest hit out of the big iron ore producers, falling by nearly 50% over the last few months. As a result, the company’s dividend yield has been inflated to an astronomical 27.9% — making it easily the highest yielding dividend stock in the ASX 200.