Westpac Banking Corp (ASX: WBC) shares have had a strong run, and I think that is now being reflected in its valuation.
At current levels, I don't see a lot of upside. The dividend is still there, but the starting point looks less attractive to me than it did a year ago.
That is why I would be looking elsewhere for income right now.
Here are three ASX dividend stocks I would buy instead.
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Harvey Norman Holdings Ltd (ASX: HVN)
Harvey Norman slipped to a 52-week low this week, which is where it starts to get interesting.
Retail has been under pressure as interest rates rise, and that has weighed on the share price. But this is a business with a long track record and a strong brand in Australia and overseas.
What I like here is the asset backing. The company owns a large property portfolio, which adds another layer to the investment case beyond retail earnings.
At this lower share price, its dividend yield is forecast to be over 8% in FY27 according to CommSec, which is why I think it is worth a closer look for income-focused investors.
Nick Scali Ltd (ASX: NCK)
Nick Scali is down close to 40% from its 52-week high, reflecting concerns over softening conditions in the furniture retail market.
Even so, the business has been through these cycles before.
It has a focused model, strong margins, and a history of managing inventory and costs well. That tends to support profitability even when conditions are softer.
With the share price well below previous levels, I think its forecast 5% dividend yield (according to CommSec) and potential for a recovery make this one stand out.
Lottery Corporation Ltd (ASX: TLC)
Lottery Corporation offers something different as an ASX dividend stock.
It hasn't seen the same kind of pullback as the others, but it provides a steady income stream backed by a defensive business model.
Demand for lottery products tends to hold up well across different conditions, which supports consistent cash flow and dividends.
With a yield around 3%, it adds a level of stability to an income portfolio, which I think is worth having alongside more cyclical names.
Foolish takeaway
Westpac still offers income, but I think the current valuation leaves less room for upside.
These three ASX dividend stocks offer a different mix. Harvey Norman and Nick Scali bring recovery potential at lower share prices, while Lottery Corporation provides steady income backed by a more defensive model.
That balance is what I would be looking for right now.
