When you mention dividend-paying shares, the first sector that normally comes to mind for most investors is ASX bank stocks.
It's not hard to see why. The ASX banks, in particular the big four, have been reliable payers of franked dividend income for decades. For most of the past 20 years, it was not uncommon to see generous dividend yields well above 4%, and sometimes 5% or even 6%, attached to the banking sector's biggest names.
However, this sector has been enjoying some meaningful gains in recent years. Nearly every major ASX bank stock has climbed significantly since 2023. Whilst that has been great for existing investors, it has had the effect of lowering the dividend yields one can expect from these investments today.
To illustrate, buying Commonwealth Bank of Australia (ASX: CBA) stock right now will get you a trailing dividend yield of just 2.64%, a low not seen in a very long time. Well, at least before 2025.
So today, with all that in mind, let's check out every ASX bank stock on the S&P/ASX 200 Index (ASX: XJO) and determine which offers the highest dividend yield right now.
Which ASX bank stock offers the best dividend yield today?
Out of the big four bank stocks, CBA is, as we've already established, the clear loser. Although its dividends typically come with full franking credits attached, the reality is you can get a far better yield from almost every other major blue-chip share on the ASX than from CBA right now.
Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) are far more competitive. These ASX bank stocks are trading on fully-franked yields of 4.51% and 4.29% at the time of writing.
ANZ Group Holdings Ltd (ASX: ANZ) goes one better. It currently sports a trailing yield of 5.46%. A caveat, though. ANZ's dividends no longer usually come with full franking. Its last few payments have only come partially franked to 60%. Additionally, some investors are anticipating that ANZ could be lining up a dividend cut.
But what about the ASX bank stocks outside the big four?
It's not just the big four banks that offer big income
Well, we have Bendigo and Adelaide Bank Ltd (ASX: BEN), Bank of Queensland Ltd (ASX: BOQ), and Macquarie Group Ltd (ASX: MQG) to consider.
Already, we can rule Macquarie out. There is some debate about whether Macquarie even counts as an ASX bank stock, given its diversified financial nature. But even if it is, it does not compete well when it comes to shareholder income, given its current 2.95% yield. This yield usually only comes partially franked, too, with the last two Macquarie dividends partially franked at 35%.
Bank of Queensland is a little better, though. It currently trades on a trailing dividend yield of 4.44% at current pricing. That yield does indeed come with full franking credits.
Bendigo Bank is even more competitive. It has a trailing yield of 4.91% on the table today, ahead of every other bank stock with the exception of ANZ. It also usually offers full franking.
As such, we can conclude that ANZ and Bendigo Bank currently offer the best upfront yields out of the ASX 200's bank stocks for dividend income investors today. Bendigo probably comes out on top with its full franking, particularly if ANZ's income proves to be unsustainable. Let's see how the rest of the year treats this venerated ASX sector.
