It's been a historic week so far for the Aussie share market, with the S&P/ASX 200 Index (ASX: XJO) notching up three all-time closing highs.
Yes, the going looks good for ASX investors right now. But stock markets are inherently volatile — which means plenty more ups (and downs!) to come.
One strategy to help buffer your wealth from market swings and individual stock fluctuations is to include some quality, dividend-paying ASX shares in your portfolio.
Even if you're not seeking dividends for immediate income, these regular payments or reinvestments can significantly boost your investment returns over time.
With the market trading around unprecedented levels, we asked our Foolish writers which ASX dividend shares they still think offer great buying in September.
Here's what the team came up with.
5 best ASX dividend shares for September 2024 (smallest to largest)
- SPDR S&P Global Dividend AUD ETF (ASX: WDIV), $270.5 million
- Collins Foods Ltd (ASX: CKF), $964.90 million
- Regal Partners Ltd (ASX: RPL), $1.05 billion
- Washington H Soul Pattinson & Company Ltd (ASX: SOL), $12.29 billion
- Westpac Banking Corp (ASX: WBC), $114.37 billion
(Market capitalisations as of market close 18 September 2024).
Why our Foolish writers love these ASX passive income stocks
SPDR S&P Global Dividend AUD ETF
What it does: The SPDR S&P Global Dividend Fund is an exchange-traded fund (ETF) that specifically targets dividend-paying shares. Not just any ASX shares though – this ETF looks for quality income stocks from all around the world.
By Sebastian Bowen: This September, I'm eyeing out the SPDR S&P Global Dividend Fund as an income investment. The ASX is full of quality dividend stocks. But, with the recent fresh all-time highs that we are seeing on the Australian stock market, I'm sure you've noticed that many of the best payers are starting to look relatively expensive. As such, I'm currently looking for some decent alternatives.
The WDIV ETF is arguably one of those quality alternatives. This fund holds a diversified portfolio of global shares with track records of delivering strong and consistently rising payouts. It currently includes names like Altria, Capital Power Corp, Pfizer, and Unilever.
This ETF's portfolio draws from more than a dozen countries, including the United States, Canada, Japan, Korea, and Taiwan. This diversity adds a lot of appeal in my eyes.
The SPDR S&P Global Dividend Fund pays out quarterly dividend distributions, which is another bonus. At recent pricing, the fund was trading on a trailing yield of 4.8%.
Motley Fool contributor Sebastian Bowen owns shares of Altria and Unilever.
Collins Foods Ltd
What it does: Collins Foods operates as a franchisee of 381 KFC and Taco Bell stores across Australia and Europe. The company's origin story stretches back to 1968 when James Collins began managing KFC and Sizzler restaurants in Australia and the United States.
By Mitchell Lawler: You won't normally see this restaurant operator grouped with the dividend deities of the ASX. Maybe it's the perceived instability of the takeout food industry or the smaller 3.4% dividend yield, but Collins Foods delivers finger-licking good value, in my opinion.
The last four years have thrown the kitchen sink at franchisees: Inflation, falling productivity, and shortages. What Collins Foods has working in its favour is scale.
If cost pressures persist, I suspect it will be survival of the biggest. Few fast food franchisees have the size and bargaining power of Collins Food in Australia – yet the company is trading on a price-to-earnings (P/E) ratio almost on par with the depths of the COVID crash.
Motley Fool contributor Mitchell Lawler does not own shares of Collins Foods Ltd.
Regal Partners Ltd
What it does: Regal Partners is a boutique asset manager that operates several alternative investment strategies. It invests in public and private securities across the globe, with a focus on Australia, employing market-neutral and absolute return strategies.
By James Mickleboro: I think Regal Partners would be a great ASX dividend share to buy in September.
Last month, it released its half-year report and delivered a very strong result that was largely ignored by the market. Its strong investment performance led to net client inflows increasing 106% over the prior corresponding period, which helped drive a 349% increase in normalised half-year net profit after tax to $59 million.
This allowed the company to increase its fully franked interim dividend by 60% to 8 cents per share. And while this dividend is now locked up, there are more generous payouts on the way, according to analysts at Bell Potter. The broker is forecasting a 13.1 cents per share fully franked dividend in FY 2024 and then 16.1 cents per share in FY 2025. Based on its current share price of $3.23, this will mean dividend yields of 4% and 5%, respectively.
This doesn't include any potential profit boost that might come from the company's proposed acquisition of Platinum Asset Management Ltd (ASX: PTM), which was announced this week.
Bell Potter also sees major upside potential for Regal shares with its buy rating and $4.30 price target.
Motley Fool contributor James Mickleboro does not own shares of Regal Partners Ltd.
Washington H Soul Pattinson & Company Ltd
What it does: Soul Patts is a 120-year-old business that takes stakes in various listed companies. It also operates some private equity companies and has credit investments.
By Tristan Harrison: The Soul Patts share price is not currently trading near all-time highs, unlike many other ASX shares.
It's also not a rapidly growing business, but I believe it's the type of investment that can be bought now and owned for the next two decades without too many worries.
I like the company's diversified portfolio across various sectors, including telecommunications, resources, building products, property, credit, agriculture, electrification, and even swimming schools!
Soul Patts has the flexibility to make investments of significant size in almost any industry. This means it can continue to adapt its portfolio to future conditions and help ensure long-term success.
The company pays dividends from the investment cash flow it receives from its portfolio. This ASX dividend stock has increased its annual ordinary payout every year since 2000, which is the longest dividend growth record on the ASX.
Soul Patts is due to release its FY24 result next week and declare another dividend, which I expect to be bigger than FY23's final dividend. The company's last two dividends amount to 91 cents per share, which translates into a grossed-up dividend yield of approximately 4% on current pricing.
Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson & Company Ltd.
Westpac Banking Corp
What it does: Established in 1817 as the Bank of New South Wales, Westpac is Australia's oldest banking and financial services group. The 'big four' bank has operations throughout Australia, New Zealand, and the near Pacific region.
By Bernd Struben: I like Westpac shares both for their reliable, fully franked dividends and the potential for further share price growth.
On the share price front, Westpac has been the best-performing of the big four Aussie banks over the past 12 months, with shares up by 53%. This has been supported by strong financial results along with the bank's $2.5 billion share buyback program.
And with the Aussie and US economies eyeing a soft landing, I believe the Westpac share price can continue to outperform (though I don't expect another 50% run higher over the year ahead!).
As for that passive income, Westpac has been increasing its dividends every year since 2020, a trend I like to see.
Over the past year, the ASX 200 bank paid a total of $1.62 in dividends, up 21% from FY 2023.
At yesterday's closing price of $33.16, that sees Westpac shares trade on a fully franked trailing dividend yield of 4.9%.
Motley Fool contributor Bernd Struben does not own shares of Westpac Banking Corp.
