Where I'd invest $7,000 in ASX dividend stocks right now

With an extra $7,000 to invest, I'd buy both of these ASX 200 dividend gems today.

| More on:
A young smiling couple out hiking enjoy a view from the top of the mountains.

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

Looking for some welcome extra passive income from ASX dividend stocks?

Well then, you really are living in the lucky country.

The ASX offers a range of high-quality dividend stocks you may wish to add to your portfolio.

And unlike many international exchanges, like stock markets in the United States, many ASX-listed companies pay franked dividends. That can come in quite handy when it comes time to pay the ATO its pound of flesh each year.

If I had a spare $7,000 to invest right now, I'd lean towards buying larger companies listed on the S&P/ASX 200 Index (ASX: XJO). ASX 200 dividend stocks tend to have less volatile share price moves than their smaller peers. And many have lengthy track records of delivering reliable passive income to their shareholders.

I'd also prefer companies that pay franking credits. And I'd aim to invest in ASX dividend stocks that I believe will grow their payouts over the time they're in my portfolio without sacrificing share price growth.

With $7,000 to invest, I'd likely only buy two stocks right now to get a decent exposure without burning too much on brokerage fees.

You'll notice both these companies operate in distinctly different sectors. Over time, I'd look to build up my income portfolio to 10 or so stocks for some proper diversification.

With that said…

Two ASX dividend stocks I'd buy now for passive income

The first ASX dividend stock I'd buy for passive income now is ASX 200 bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ reported its half-year results on Tuesday.

The big four bank's cash profit was down 1.0% year on year to $3.55 billion. However, management pleased shareholders by raising the interim dividend by 2.5%. That came in at 83 cents per share, franked at 65%.

The good news is there's still time to grab that payout. Though not much!

ANZ shares will trade ex-dividend on Monday. Meaning if I want to bank that passive income, I'd need to own shares at market close today. I can then expect to be paid on 1 July.

Atop the interim dividend, ANZ paid a partly franked final dividend of 94 cents per share on 22 December.

This equates to a full-year payout of $1.77 per share.

At yesterday's closing price of $28.79, that works out to a yield (partly trailing, partly pending) of 6.15%.

Which brings us to the second ASX dividend stock I'd buy now with my spare $7,000, ASX 200 oil and gas stock Woodside Energy Group Ltd (ASX: WDS).

Woodside's dividends have come down over the past 12 months amid lower energy prices. The company was also struggling with regulatory approvals for its massive offshore Scarborough Energy Project.

But Scarborough is now proceeding to plan again, and the oil price is firming up.

The outlook for share price and income growth from this ASX dividend stock also improved yesterday. That followed Federal Resources Minister Madeleine King's strong support for the long-term role of Australian gas in providing jobs and energy and helping the nation and its trading partners through the global energy transition.

As for the past 12 months, Woodside paid an interim dividend of $1.243 per share on 28 September and a final dividend of 91.7 cents per share on 4 April, both fully franked.

At yesterday's closing price of $28.10, this ASX dividend stock trades on a fully franked trailing yield of 7.69%.

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.

More on Opinions

Two excited woman pointing out a bargain opportunity on a laptop.

2 great value ASX shares I want to buy

These stocks are high on my watchlist.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop

1 ASX 200 dividend stock down 20% to buy right now

This beaten-up ASX share could be a top pick for dividends and stability.

Read more »

Man sitting in a plane looking through a window and working on a laptop.

2 cheap ASX 200 shares I'd buy in May

I think these stocks are too cheap to ignore.

Read more »

Invest written on a notepad with Australian dollar notes and piggybank.

I'd invest $10,000 into these excellent ASX shares for the long term

I’m bullish about these top stocks.

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.

Should you buy Telstra stock on a pullback?

Is this telco a buy for value hunters?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.

1 overlooked ASX growth stock I'm chasing for multibagger potential

I believe this stock can create strong returns in the years ahead.

Read more »

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

How I plan to invest my tax cuts

I have big plans for my tax cut cash this year.

Read more »

a man's hand places a white egg into a basket of similar white eggs.

With its 8% yield, I think this undervalued ASX 200 stock is an opportunity not to miss

The value and passive income of this stock looks very eggciting to me.

Read more »