With interest rates in Australia coming off the boil, ASX All Ords dividend stocks offer an alluring alternative to earning extra passive income from your idle savings.
Last week, the RBA cut the benchmark Aussie interest rate from 4.10% to 3.85%. This brings the rate down 0.50% from its 4.35% level in February.
But for savers willing to take on some more risk by investing in the stock market, there are a number of dividend stocks trading on the All Ordinaries Index (ASX: XAO) that pay significantly higher yields than today's dwindling bank deposit rates.
Like Dexus Convenience Retail REIT (ASX: DXC), a property company that owns a quality portfolio of Australian service stations and convenience retail assets.
The Dexus share price has gained 10.0% over the past 12 months.
And in that time, the ASX All Ords dividend stock, which pays out on a quarterly basis, has paid out a total of 20.6 cents a share in unfranked dividends.
At the current Dexus share price of $2.97, the stock trades on an unfranked trailing dividend yield of 6.9%.
And, according to Sanlam Private Wealth's Remo Greco, the company's share price and dividends stand to benefit from any further RBA interest rate cuts (courtesy of The Bull).
An All Ords ASX dividend stock for a lower interest rate environment
"DXC is a listed property trust, which owns a portfolio of service stations and convenience retail assets across Australia," said Greco, who has a buy recommendation on the ASX All Ords dividend stock.
And Greco noted that Dexus is trading at a steep discount to the value of its assets.
"We calculate the value of the assets held by DXC is around $3.57 a share, however the price was trading at $2.96 on May 22," he said.
As for the passive income outlook amid potentially even lower interest rates, Greco concluded, "The recent dividend yield was about 7%. DXC offers potential for capital gains and low risk income, particularly if interest rates continue to fall."
What's the latest from Dexus?
Dexus reported its half-year results on 10 February.
Among the highlights for the six months to 31 December, the ASX All Ords dividend stock reported "resilient top line growth" with like-for-like net property income growth of 2.8% and average rent reviews of 3.1%.
Statutory net profit after tax (NPAT) of $14.7 million was up from an NPAT loss of $1.7 million in the prior corresponding period. The company said this mainly reflected property valuation gains recorded during the half compared to valuation losses in the prior corresponding half.
Commenting on the solid performance on the day, Dexus fund manager Jason Weate said, "We strategically divested circa 5% of our portfolio on solid price terms, which has enhanced portfolio quality and balance sheet flexibility."
The ASX All Ords dividend stock closed up 1.1% on the day the results were released.
