Dividend stocks. So this year I’ve collected a thousand dollars in dividends payments
thanks to just a couple of good dividend stocks. But picking out the best dividend
stocks can be pretty confusing because there’s just so many across the board. So
today I’m going to share some strong dividend stocks to watch for 2022. Why just 2022,
well because the cost of getting the dividend stocks changes because the stock price might
fluctuate or the market conditions change for that company, so it's always best to keep
up to date before considering any stocks for its dividends. Now let’s get started.
Wait wait wait, but first, let’s talk about just chasing the highest dividend stocks. Now that’s
actually easy to find because you just pull up a spreadsheet of all the company's dividend yields
and just filter for the highest dividend yields, and even websites like Marketindex which is one of
my favourites to use for stock research has a page dedicated to finding the highest dividend stocks.
And on the ASX, its actually usually mining companies that usually take out the top spots.
So last year, the mining company Fortesque Metals had the biggest dividend yield. But that happened
when the iron ore price was extremely high, record high in fact. And since then, the stock price of
FMG has dropped a bit. So if you were to go and buy FMG today, you wouldn’t get anywhere near
the advertised dividends the next time that they pay. And that’s what we call a dividend trap.
But I'm going to try and cancel that out though, because I’m going to try and adjust the dividend
yields based on the stock price at the time that they paid out. So that way, it's a much
closer predictor of the dividend yields for that stock. So a couple of conditions for my filter
is that the dividend yield must be more than 5%, and its dividend stability must be more than 90%
as well. And that means that it hasn’t really missed a payment in the last 10
years and has been pretty consistent. Now I’m also going to organise this by
the month of payout, so if you own a few of these, then they'll pay out every month which
kind of feels more like a salary being paid which is always a good thing.
Now let's start with January, which doesn't have a lot of choices, but I would go with Vanguard High
Yield, Metcash, and Shopping Centres Australia. They're all generally pretty good dividend stocks
that all pay around 5-6% yield. Now the Vanguard one is especially a good stock because that's
an ETF that diversifies into blue chip companies that pay good dividends, and it
pays quarterly as well which I personally think is better than being paid out half yearly.
So moving onto February, February is more of a property companies month for dividends
with companies like Scentre Group, GPT Group and Stockland, but there’s also JB Hi Fi for
a bit of variety in the retail sector and they actually pay more dividend yield than the other 3.
Now Sydney Airport would normally also be here here, but that looks like it's going
to be sold off to an investment company so I’ve kept that off the list here.
Now March is a huge month for dividend so I've going to have to get rid of my face here. So the
most generous company is BHP at 12% yield. That’s followed by AGL energy with 10% but the company
has been struggling and will likely split into 2 soon so it might be quite volatile. Then we have
Aurizon, Bendigo and Adelaide Bank, Alumina, and Vicinity Centres. I’ve also included Australia’s
biggest bank CBA here because it's just such a safe investment even if its dividend yield
just falls short of the 5% limit. And also Origin Energy might be something to consider over
AGL as a more stable energy stock. Now in April we have the superstar of
dividend stocks FMG as the clear winner with a massive 24% in dividend yield,
and Rio Tinto comes in second with 14% yield. Now before you go rushing into buying them, I’ll just
mention that this is because of record iron prices last year and it doesn’t look like it's going to
be the same in 2022. I would guess 2022 will only give around half the dividend payout of last year
so you need to factor that in. Now another super dividend stock was Super Retail Group which owns
stores like BCF and Super Cheap Auto. Then we have Suncorp, the second Vanguard High Yield payment,
and Spark New Zealand bringing up the rear. Back to my face, so May is actually pretty limited
with only 2 companies paying good dividends in that month. So first we have Cromwell Property
Group which is a REIT stock paying around 8.5% yield and then we have Harvey Norman.
Now that's stayed on my list because it pays quite a high dividend. But its been paying out
more in dividends that it has been generating. So I personally don't really know anyone that
shops at Harvey Norman, I know lots of people that go to JB Hi Fi for example,
so a few warning bells for me on that one. June is completely barren in terms of
5% yield stocks, but Ausnet pays out 4.3% if you’re desperate for some mid-year income.
Ausnet owns and operates the electrical transmission network in Victoria, so I
think they are generally quite a stable option. Ok July is the month of bank payouts. We've got
Westpac, ANZ and NAB all pay around 5% yield here. If you want to know the difference between the big
4 banks, check out my video here. Actually in July, the biggest yield is the building materials
company CSR with an 8% dividend yield, and with Australia’s love for housing and renovations, that
looks set to continue in 2022 as well. We also have the third payment of Vanguard High Yield,
and the Engineering firm Cimic group as well. Now for August and the rest of the year, they’re
gunna be repeated because it's the second dividend payments of all these stocks. I’ll keep showing
the visuals but let me rattle off dividend facts that you might not know. For example, dividend
franking is something that only Australia, New Zealand and only a few other countries have.
So the US actually don’t have this tax benefit. Any dividends paid to shareholders gets double
taxed. And for this reason, US stocks have much lower dividends than ASX stocks as they prefer to
invest and grow their share price instead. Dividend hunting is the practise of buying stocks
on the day that it goes ex-dividend, holding it for one day then selling off straight away.
This qualifies you to get the dividend but the share price usually jumps up on the ex-date, then
falls the following day. And that fall is usually around the dividend yield anyway so the gain in
getting an instant dividend actually cancels out against your capital gains loss. So this
is something that I don’t really recommend. Dividend Reinvestment Plans or DRIP on the other
hand are something I definitely encourage. It lets you receive more shares in the company
instead of getting paid in cash. The reason why it’s good is because it's brokerage free,
and you get a discount on the market price of the share, so even if you sell it straight away,
you’ll still make more than getting a cash dividend. Keep in mind that DRPs are still
taxed as if you did take the cash though. Alright so that’s the summary of the best
dividend stocks on the ASX for 2022. Let me know what you think about this list and tell
me if I've missed anything that you think is just as good down in the comments below. Don’t forget
to drop a like on this video if you liked it, and subscribe for more investing content like
this for Australians. Thanks for watching and as always, I’ll see you in the next video.