If you are searching for reliable income on the ASX, one blue-chip energy stock stands out right now.
The Woodside Energy Group Ltd (ASX: WDS) share price is down 0.35% today to $28.14. At that level, the oil and gas giant is offering a dividend yield of around 6%.
Following its full-year results on Tuesday, is this ASX income share worth buying?
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A 6% yield backed by cash flow
Woodside declared a fully-franked final dividend of 59 US cents per share, bringing total FY25 dividends to 112 US cents per share.
That equates to roughly a 6% yield at current prices.
This payout is supported by strong underlying earnings and cash flow. For FY25, Woodside generated:
- $9.3 billion in EBITDA
- $7.2 billion in operating cash flow
- $1.9 billion in free cash flow
Despite lower average realised oil and LNG prices during the year, the company still delivered underlying net profit after tax (NPAT) of $2.6 billion.
Management continues to target a dividend payout ratio of 50% to 80% of underlying NPAT, and FY25's dividend sat at the top end of that range.
Balance sheet strength supports the dividend
Dividend yields mean little if the balance sheet is stretched.
Woodside finished FY25 with liquidity of $9.3 billion and gearing of 18.2%, comfortably within its 10% to 20% target range. The company also retains investment-grade credit ratings.
Management estimates a breakeven oil price of around US$34 per barrel for 2026 to 2027.
This suggests Woodside can cover operating costs, capital commitments, and dividends even if oil prices retreat materially from current levels.
It also provides resilience through periods of weaker commodity prices and reduces the risk that softer markets would force a sharp cut to shareholder returns.
Growing production while protecting dividends
Major projects, including Scarborough, Trion, and Louisiana LNG, continue to advance, while Beaumont New Ammonia achieved first production in December.
These projects are expected to support long-term production and cash flow growth. Management is guiding for volumes of 172 to 186 million barrels of oil equivalent in 2026, alongside disciplined capital spending.
Is this ASX income share a buy?
Energy stocks always carry commodity price risk. Oil and LNG prices can move quickly based on global growth, geopolitics, and supply dynamics.
However, Woodside combines a solid 6% yield with strong cash generation, investment-grade credit metrics, and a clear capital management framework.
At $28.14, the stock offers income today and exposure to long-term LNG demand growth.
If you're seeking dependable dividends with global energy exposure, Woodside could be one ASX income share worth serious consideration.
