Although some experts say that stock markets are beginning to reflect this inflation is now under controlprice pressures continue to affect our daily lives—and our capital gains. One way to help offset the rising cost of living is through additional income.
To find potential extra income, we asked our Foolish members which ASX dividend stocks attract their attention in October. Here’s what the team came up with.
Top 8 ASX Dividend Stocks for October 2022 (Smallest to Largest)
Accent Group Ltd (ASX: AX1), $707.14 million
Dicker Data Ltd (ASX: DDR), $1.67 billion
Deterra Royalties Ltd (ASX: DRR), $2.25 billion
Metcash Limited (ASX: MTS), $3.73 billion
Yancoal Australia Ltd (ASX: YAL), $8.02 billion
Wesfarmers Ltd (ASX: WES), $50.88 billion
Woodside Energy Group Ltd (ASX: WDS), $64.46 billion
Westpac Banking Corp (ASX: WBC), $82.28 billion
(Market capitalization as of market close on October 14, 2022)
Why our silly writers love these ASX dividend stocks
Accent Group Ltd
What it does: Accent Group is all about shoes a retailer behind many of the main Australian shoe stores. It boasts more than 500 stores across 19 brands, including The Athlete’s Foot, Glue and Hype.
Pa Brooke Cooper: Accent Group 2022 shares fell 47% to $1.305 at the close on Friday.
This dip could be a buying opportunity. This is reported by my Fool colleague James Morgans suggests stocks are rising 60% to trade at $2.
The company is also a consistent dividend payer. it is now trading at 5.2% dividend yieldoffering 6.5 cents fully franked dividends per share in the last 12 months. This is also projected to increase.
The brokerage expects the company to offer 9 cents per share this fiscal year and 11 cents per share in fiscal 2024.
Motley Fool contributor Brooke Cooper owns no shares of Accent Group Ltd.
Dicker Data Ltd
What it does: Dicker Data is one of the largest technologies distributors of hardware, software, cloud, cyber security, access control and surveillance in Australia and New Zealand.
Encouragingly, the company’s strong form continued into fiscal 2022, with Dicker Data reporting a 36% increase in first-half revenue and 19.5% growth in earnings before interest, taxes, depreciation and amortization (EBITDA).
Dicker Data recently raised funds to expand its warehouse by 70%. This provides significant runway to capture additional growth in the coming years and is also expected to result in cost savings.
Morgan Stanley presently has an outperform rating and a $14.00 target price on shares of Dicker Data. On the dividend side, the company’s analysts forecast fully franked dividends per share of 36.2 cents in fiscal 2022 and 42.2 cents in fiscal 2023.
Dicker Data’s share price of $9.26 at Friday’s close would imply a yield of 3.9% and 4.5%, respectively.
Motley Fool contributor James Mickleborough does not own Dicker Data Ltd stock.
Deterra Royalties Ltd
What it does: Deterra Royalties has several mining royalties in Western Australia. The company primarily derives revenue from royalties for Mining Area C (MAC), a majority-owned iron ore mining hub BHP Group Ltd (ASX: BHP).
Pa Mitchell Lawler: I’ll be the first to admit that I’m not often a fan of ASX stocks with exposure to the resources sector. However, I think Deterra Royalties is different from most mining and commodity companies.
Although the demand for iron ore may be declining every year, there is no doubt that steel plays an important role in society. As such, BHP plans to continue increasing production at its MAC mining center in the coming years, which will boost Deterra’s earnings.
In addition, Deterra is less prone to potential exposure inflation due to the nature of the royalty-based business model. Last fiscal year, Deterra recorded a paltry $729,000 in operating expenses, leaving the rest of its $265 million in revenue for profit.
Right now, Deterra is delivering a staggering 8.3% dividend yield – and it’s debt free.
Motley Fool contributor Mitchell Lawler does not own shares of Deterra Royalties Ltd.
What does he do: Metcash has three pillars of its business. Through its food pillar, it supplies independent supermarkets such as IGA. Its spirits segment supplies Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel and Duncans. Finally, Metcash owns brands such as Miter 10, Home Timber & Hardware and Total Tools in its hardware division.
I like the company’s efforts to invest in its business with MFuture, designed to facilitate online sales and increase efficiency. Metcash is building new warehouses and distribution facilities and has completed a paperless warehouse initiative. For online sales, he is rolling out e-commerce initiatives for IGA retailers.
In my opinion, the hardware business can provide good profit growth in the long term, especially if it expands its network.
Metcash’s share price is near its 52-week low, but is still holding steady the first 17 weeks of FY23 by August 28, group sales were up another 8.9%.
Using the FY22 payout of 21.5 cents, Metcash has a total dividend yield about 8%.
Motley Fool contributor Tristan Harrison does not own shares of Metcash Limited.
Yancoal Australia Ltd
What does he do: Yancoal Australia is an ASX clean coal company that produces both thermal and metallurgical coal. Its seven coal mines are in Australian Tier 1 locations with an average mine life of two decades. The company sells coal all over the world.
Pa Bronwyn Allen: Many commodity stocks soared in 2022.
That means mining companies making more money from what they get out of the ground, while their costs stay the same or at least don’t rise as much.
of course inflation now running at a 20 year high of 6.1% per year, but the price of coal is up 66% year over year so you get my point.
As we reported recentlyaccording to analyst consensus, Yancoal pays around 37% dividend yield in FY22, which is about 8 times the average S&P/ASX 200 Index (ASX: XJO).
As Katana Asset Management points out, that’s a third of your investment in a year.
A word of caution, though: Commodity stocks are paying higher dividends today because of high coal prices. If the price of commodities changes, your dividends will be returned.
Motley Fool contributor Bronwyn Allen does not own shares in Yancoal Australia Ltd.
What it does: Wesfarmers is a diversified ASX 200 retail company. Its divisions include well-known names such as Bunnings Warehouse, Kmart Australia, Covalent Lithium and Officeworks, among others.
Pa Bernd Struben: Wesfarmers is well known among income investors for its reliable dividend payments, traditionally making two fully franked dividend payments per year.
With Wesfarmers’ share price down 24.3% year-to-date, shares are currently trading on a trailing yield of 4.01%. Morgans analysts forecast a dividend payment of $1.82 in the current fiscal year and $1.89 in FY24. This will mean a stable yield this year, rising to 4.2% next year.
Sweetening the picture, Morgans has a $55.60 target price on Wesfarmers shares, which is 24% above Friday’s close of $44.87.
Motley Fool contributor Bernd Struben does not own shares in Wesfarmers Ltd.
Woodside Energy Group Ltd
Pa Monica O’Shea: Woodside shares are up nearly 51% year-to-date from Friday’s closing price of $33.07XX.
Woodside investors recently received a fully interim dividend of 109 US cents. This 263% higher than the interim dividend of 30 US cents paid in 2021 and 319% more than the dividend of 26 US cents paid in 2020.
Due to the ongoing Russian-Ukrainian conflict, the outlook for gas and oil prices remains uncertain.
However, recently the Federal Department of Industry Resources and Energy Report expects Australia’s LNG export revenues to grow by nearly 29% in the 2023 financial year before leveling off in 2024.
The report noted that Russia’s invasion of Ukraine exerted “upward pressure on LNG prices.” Oil export earnings will also increase in FY23 before declining in 2024.
Given this, I believe that Woodside will likely remain a decent dividend investment in the near term.
Motley Fool contributor Monica O’Shea owns no shares of Woodside Energy Group Ltd.
Westpac Banking Corp
What it does: Westpac is one of the six banking specialties in Australia and operates in traditional banking lending and financial services markets.
Pa Zack Bristow: Investors have enjoyed a long stream of dividends from Westpac since the very early days of the Australian Securities Exchange (ASX).
The current macroeconomic climate would normally be favorable for ASX banking stocks, however, this has not been the case in 2022.
Despite this, consensus analyst estimates predict Westpac will post a 6% forward dividend yield in FY23, according to data from Refinitiv Eikon [at the current share price].
The bank also delivered an above-sector net interest margin in FY21 and looks well positioned to continue generating free cash flow for its future dividend payments.
Investors can therefore take advantage of any pricing weakness to capture a 6% yield, while analysts at UBS value Westpac shares at $27 apiece.
Motley Fool contributor Zach Bristow does not own Westpac Banking Corp shares.