Why dividend-paying ASX energy stocks are gaining traction in Australia

2022 saw interest in ASX dividend-paying stocks in the energy sector take off.

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If it's passive income you're after, ASX dividend-paying energy stocks have been hard to ignore of late.

2022 really saw ASX dividend-paying stocks in the energy sector take off.

That came amid soaring oil, gas and coal prices, which saw the companies sharing their record revenues and profits with stockholders.

While those commodity prices have come off the boil in 2023, they remain elevated by historic standards. As do the dividends paid out by the big energy companies.

And Aussie income investors have an advantage over most of their international peers in that many ASX dividend-paying stocks come with franking credits, offering potential benefits at tax time.

Australia also happens to be particularly fortunate with its large on and offshore oil and gas deposits, and world-leading coal and uranium reserves.

While ASX uranium miners don't count among the dividend-paying stocks yet, that could be set to change amid a global surge in uranium demand.

As for the other energy shares, here's why they've been gaining traction with passive income investors.

An oil worker in front of a pumpjack using a tablet.

Image source: Getty Images

High-yielding dividend-paying stocks in the energy sector

The companies dominating Australia's energy sector have been among the highest-yielding stocks on the ASX.

To give you some idea of just why they've been so hard to ignore for income investors, let's take a look at the dividends paid out by these leading ASX energy income stocks over the past two years.

On the oil and gas front, Woodside Energy Group Ltd (ASX: WDS) leads the pack. At the current price of $30.88, Woodside shares trade on a fully franked trailing yield of 11%.

If you'd bought this dividend-paying stock in early February 2022, when it was trading for $26.27, you would have been eligible to receive the past four dividend payouts.

With this year's final dividend hitting an all-time high, those four payouts equate to a total of $6.46 per share.

Turning to ASX coal shares, New Hope Corp Ltd (ASX: NHC) trades on a fully franked trailing yield of 13.7%, and Whitehaven Coal Ltd (ASX: WHC) trades on a fully franked trailing yield of 10.3%.

But those juicy figures pale in comparison to the 22.3% partly franked trailing yield offered by Yancoal Australia Ltd (ASX: YAL) at the current share price of $4.80.

If you'd bought this dividend-paying stock in early February 2022, you could have bought in for $2.81 per share. And you would have received the past four dividend payouts, totalling $2.31 per share.

Grabbed your attention yet?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.

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