With interest rates as high as they are and the best savings accounts delivering 5.75% returns, ASX dividends are on investors' minds this year.
The ASX 200 bank shares and mining shares are well-known for delivering some of the highest dividend yields in the market year after year.
But if you do some digging, you'll find other great dividend payers in other market sectors.
Typically, the companies that will pay you the best dividend yields are the ASX 200 large-cap shares.
With a minimum market capitalisation of $10 billion, these are the biggest companies on the market. Most of them have been operating for decades, bringing in sustainably strong earnings every year.
Let's look at which ASX 200 large-cap shares are trading on the highest trailing dividend yields today.
Woodside is the best ASX dividend payer
The best payers of the ASX 200 large-cap shares today, based on trailing dividend yields, are:
| ASX 200 LARGE-CAP SHARE | ASX DIVIDEND YIELD | PAID PER SHARE |
| Woodside Energy Group Ltd (ASX: WDS) | 11.1% | $3.40 |
| Pilbara Minerals Ltd (ASX: PLS) | 7.14% | 25 cents |
| APA Group (ASX: APA) | 6.86% | 55.5 cents |
| Fortescue Metals Group Ltd (ASX: FMG) | 6.27% | $1.75 |
| ANZ Group Holdings Ltd (ASX: ANZ) | 6.21% | $1.75 |
| Westpac Banking Corp (ASX: WBC) | 5.82% | $1.42 |
| BHP Group Ltd (ASX: BHP) | 5.81% | $2.61 |
| National Australia Bank Ltd (ASX: NAB) | 5.08% | $1.67 |
| Santos Ltd (ASX: STO) | 4.88% | 35.76 cents |
| Transurban Group (ASX: TCL) | 4.77% | 61.5 cents |
| Telstra Group Ltd (ASX: TLS) | 4.36% | 17 cents |
| South32 Ltd (ASX: S32) | 4.15% | 12.31 cents |
A word of warning on trailing dividend yields
If you're using this data to research ASX dividend shares, just remember that trailing dividend yields represent last year's earnings as a percentage of today's share price.
Next year's earnings may be much lower (or higher).
This is particularly the case with mining stocks, oil shares and any other stock associated with commodities.
These companies negotiate the sale prices for their products based in large part on the going global market commodity price at the time.
Commodity prices are entirely out of these companies' hands. When they're high, mining and oil shares are likely to earn more and pay higher dividends. When they're low, the reverse happens.
Conversely, large non-commodity companies producing the same services or products year after year may have limited room for growth, and hence they may deliver very stable earnings and dividends.
Here are some examples showing why you need to bear all this in mind when researching dividend yields on ASX stocks.
ASX dividend case studies
Woodside shares
ASX oil & gas giant Woodside is shown here as the top payer because its trailing dividend amount (i.e, the annual dividend amount paid in 2023) was $3.40 per share.
The Woodside share price is currently $30.64, so we get a trailing dividend yield of 11.1%.
But global oil and gas commodity prices have been fluctuating pretty wildly, and the consensus forecast among analysts on CommSec is that Woodside will pay nowhere near as much in dividends this year.
The analysts are currently forecasting a 2024 annual dividend of $1.62, which would equate to a 5.28% yield. That's more than a 50% reduction in yield compared to 2023.
Pilbara Minerals shares
The 2024 dividend forecast is far worse for this ASX lithium share, following an 80% plunge in the lithium price in 2023.
The company has already flagged that it is unlikely to pay any dividend at all for 1H FY24.
Let's compare these two commodity-related stocks to one of the Big Four banks.
ANZ stocks
Our biggest payer among financial stocks listed above, based on trailing dividend yields, is ANZ shares.
In 2023, ANZ paid $1.75 per share in dividends. The consensus forecast on CommSec is for ANZ shares to pay $1.62 per share in 2024, the same in 2025, and $1.625 in 2026.
The dividend is pretty stable because ANZ is a big, mature business delivering reliable annual earnings.
On top of that, the ANZ share price doesn't move much over time (except during major bull runs and market crashes when all stock prices move significantly), so dividend yields stay pretty even.
The 20-year chart of ANZ shares and dividends below shows this.
Why choose ASX shares over simple savings?
Five of our top 12 ASX dividend stocks listed above will pay less than the best interest rate on savings accounts today, which is 5.75%, according to RateCity.
So, why would you buy ASX shares instead of investing cash in a simple risk-free savings account?
There are two key reasons:
- ASX shares offer the possibility of capital growth as well as yield. Savings only pay a yield.
- Dividends paid by many ASX 200 large-cap shares carry franking credits, which reduce an investor's tax liability. There are no tax breaks on interest earnings.
We recently published a team post, Top ASX shares to buy in 2024 instead of investing in a term deposit.
