S&P/ASX 200 Index (ASX: XJO) shares can be excellent candidates for dividend income because they're large enough in scale to provide significant payouts and still have earnings growth potential.
While businesses like Fortescue Ltd (ASX: FMG) and Commonwealth Bank of Australia (ASX: CBA) get a lot of attention for their dividend payments, I don't think they are at an appealing value to buy right now.
Other ASX 200 shares seem to have better long-term growth prospects and are trading at better values. Let's look at some other opportunities here.
Sonic Healthcare Ltd (ASX: SHL)
Sonic Healthcare is one of the world's largest pathology businesses, with a presence in Australia, the USA, Germany, the UK, and a few other Western countries.
I think healthcare is one of the most defensive sectors, but also offers growth thanks to the increasing and ageing populations of Sonic Healthcare's markets. Plus, it has utilised acquisitions to good effect to boost its scale, particularly in a place like Switzerland.
The ASX 200 share has delivered long-term growth over the years, with further growth in FY25. The last financial year saw net profit growth of 7%, cash flow growth of 21%, and a 1% increase in the annual dividend per share to $1.07.
At the current Sonic Healthcare share price, it has a dividend yield of 4.7%, excluding any possible franking credits. The company is expecting to deliver a progressive dividend in the future.
It's expecting to grow its earnings per share (EPS) by up to 19% in FY26, using the same exchange rate.
Metcash Ltd (ASX: MTS)
Metcash is a diversified food, liquor, and hardware business. It supplies IGAs across Australia, as well as a number of independent liquor brands, including Cellarbrations, The Bottle-O, IGA Liquor, Porters, Thirsty Camel, and others. Its hardware division includes a number of businesses, including Mitre 10, Home Hardware, True Value Hardware, Thrifty-Link, Hardings, Design 10, and Total Tools.
In the trading update for the 18 weeks to 31 August 2025, the company saw total sales rise 1.1%, or 5.1% excluding tobacco. Total food sales grew 8.6% excluding tobacco, or 0.6% including tobacco, liquor sales increased 1.5%, and hardware sales grew 1.8%.
Pleasingly, hardware sales are seeing growth in both trade and DIY. The food division is seeing particularly strong growth in foodservice and convenience.
The ASX 200 share aims to deliver a dividend payout ratio of 70% of underlying net profit.
In FY25, it paid an annual dividend per share of 18 cents. That translates into a dividend yield of 4.5%, or 6.5% including franking credits. If sales and scale continue improving, I think the business can grow its payout in FY26 and beyond.
