Looking for dividend shares outside mining and banking? Read this

Here’s where you might be able to land some dividends outside of the run-of-the-mill names…

| More on:
a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If there’s one thing income investors love, it’s watching the dollars trickle in and stack up as their dividend shares deliver. Simply put, it really gives the sense that you are making money while you are sleeping.

However, as investors, we reserve the right to be picky with our investments. Not everyone is industry agnostic when it comes to the share market. This presents a challenging case if you are salivating for some dividend delights, but aren’t so keen on the mining and banking sectors.

Here’s a look at where a couple of investing experts turn to outside of the ASX dividend shares staples.

Looking beyond the regular dividend shares of the ASX

Whether it be for ethical reasons, or maybe mining and banking shares just aren’t your jam, looking for shares with a reasonable yield outside of these sectors can be a challenge.

For example, below is a snapshot of the highest yielding ASX shares in the All Ordinaries Index (ASX: XAO) with dividend per share growth of more than 5% in the last year… do you notice anything?

ASX-listed companyDividend yieldSector
Base Resources Limited (ASX: BSE)20.9%Mining
Fortescue Metals Group Limited (ASX: FMG)13.7%Mining
BSP Financial Group Ltd (ASX: BFL)13.0%Financials
Zimplats Holdings Ltd (ASX: ZIM)10.7%Mining
Grange Resources Limited (ASX: GRR)9.88%Mining
Jupiter Mines Ltd (ASX: JMS)9.26%Mining
Euroz Hartleys Group Ltd (ASX: EZL)9.20%Financials
New Hope Corporation Limited (ASX: NHC)9.16%Energy
BHP Group Ltd (ASX: BHP)9.03%Mining
VGI Partners Ltd (ASX: VGI)8.81%Financials
Data as at 3:20pm AEST

As you might have recognised, mining and financials dominate the top-yielding dividend shares. So, what are some other options for investors? Dr Don Hamson from Plato Investment Management has his eyes on energy and consumer discretionary.

Shared in an interview with Livewire, Hamson highlighted energy shares as a beneficiary of supply shortages. In short, the higher realised prices for energy commodities should help boost dividends for these companies. While not a pick from Hamson himself, energy outfit New Hope is the only ASX dividend share outside of the mining and financials sector that appeared in our top-yielding names.

Is tech even an option for dividends?

While the tech sector has been lumped into a negative boat among investors recently, Janus Henderson portfolio manager Jane Shoemake thinks that could be a mistake.

Although we might have to look further abroad, Shoemake believes there are opportunities for bagging a decent dividend share in the tech sector. Specifically, the portfolio manager named Microsoft Corporation (NASDAQ: MSFT) as a dividend share that might be overlooked by investors. Supplying justification, Shoemake said:

[…] we believe it is important not to consider just the yield, but also the potential for a company to sustain and grow its dividend. Some lower-yielding stocks, such as those in the technology sector, for example, offer very attractive dividend growth characteristics.

With a yield of 0.8%, it doesn’t exactly churn out the same kind of yields as ASX mining companies. However, the expert noted that the company has been consistently growing its dividend by around 10% per annum for several years.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

Person pointing at an increasing blue graph which represents a rising share price.
Dividend Investing

Guess which little-known ASX share is soaring 15% on special dividend news

Investors are paying more attention to dividend stocks as the pace of capital gains looks to slow amid rising interest…

Read more »

Adult man wearing a black suit and necktie calculating via old fashioned calculator, surrounded by newspapers.
Dividend Investing

Everything you need to know about the latest AGL dividend

The ASX 200 energy giant has posted its lowest regular dividend since listing.

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
Dividend Investing

Everything you need to know about the latest Newcrest dividend

The ASX 200 gold and copper producer has halved its final dividend year-on-year.

Read more »

Dividend Investing

Brokers name 2 ASX dividend shares to buy

Brokers have named these dividend shares as buys...

Read more »

A woman holds out a handful of Australian dollars.
Dividend Investing

Everything you need to know about the latest Transurban dividend

How big is Transurban's new dividend yield?

Read more »

Happy smiling young woman drinking red wine whilst standing amongst the grapevines in a vineyard as the Treasury Wines share price rises today
Dividend Investing

Treasury Wine share price defies market slump. Could it be the dividend boost?

The winemaker just lifted its dividend. Here are the details.

Read more »

A man wearing a blue jumper and a hat looks at his laptop with a distressed and fearful look on his face as he reads about the Core Lithium share price falling 30% in a month
Dividend Investing

Here’s why the IAG share price is slumping today

The insurer's shares are treading lower for a reason today...

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Dividend Investing

Here’s the BHP dividend forecast through to 2026

Where is the BHP dividend heading in the coming years?

Read more »