When it comes to buying ASX shares for long-term income, there are a few stocks out there that are practically perfect. The ASX is full of healthy companies that have funded fat, and often fully franked, dividends for decades, and that show no signs of being unable to continue this trend.
Some of those stocks include, at least in my opinion, National Australia Bank Ltd (ASX: NAB), Telstra Group Ltd (ASX: TLS), Washington H. Soul Pattinson and Co Ltd (ASX: SOL), and Wesfarmers Ltd (ASX: WES). If receiving a healthy stream of dividend income is a priority for your portfolio, I believe any of those companies would find a happy home there.
There's another one of those stocks that I want to discuss today, though. Unlike those mentioned above, this particular Australian stock is down by 25% from its most recent high.
That stock is none other than Woolworths Group Ltd (ASX: WOW).
Woolworths is an Australian stock we all know, and may or may not love. It owns the eponymous network of supermarkets that dominate the Australian grocery landscape, of course. It also owns the Big W discount chain.
The Woolworths share price last peaked way back in August of 2021. At that time, the company hit a high of just over $42.60 a share. Today, those same shares are worth just $31.81 at the time of writing. That means Woolworths stock has lost 25% since that peak almost four years ago.
This share price drop hasn't come out of the blue. The company has had a tough few years. Investors have reduced the premium they are willing to pay for this company's shares following concerns over Woolworths' corporate structure and damage to its brand. This has seen its arch-rival Coles Group Ltd (ASX: COL) gain market share at its expense.
Despite all of this, I think Woolworths is still an ASX stock that is perfect for long-term income investors.
Three reasons to buy this ASX income stock today
Firstly, even though Woolworths has faced some problems, I think its future is secure. The company is investing heavily in automation and online delivery, which bodes well for its long-term growth.
Secondly, Woolworths operates in a sector that is almost invulnerable to disruption. After all, we all need to eat, drink, and stock our households with essentials on a regular basis. As long as Woolworths is one of the cheapest and most convenient places to fulfil these needs, it should continue to make money.
Thirdly, Woolworths' share price stagnation has given the company's fully franked dividend yield a massive boost. Before 2025, it was uncommon to see Woolworths shares trading on a dividend yield anywhere near 3%. Today, its yield is sitting at 3.02% (at the time of writing).
As such, I think it's an opportune moment to add Woolworths shares to a diversified income portfolio today if you're an investor who prioritises those dividends.
