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The Australian market is currently experiencing uncertainty, with ASX 200 futures fluctuating and recent interest rate decisions adding to investor caution. As the Reserve Bank of Australia's rate cut and mixed signals from global markets contribute to this volatility, dividend stocks like BHP Group offer a potential avenue for investors seeking steady income amidst these unpredictable conditions.

Top 10 Dividend Stocks In Australia

Click here to see the full list of 32 stocks from our Top ASX Dividend Stocks screener.

Let's review some notable picks from our screened stocks.

BHP Group

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: BHP Group Limited is a global resources company with operations spanning Australia, Europe, Asia, and the Americas, and it has a market cap of A$206.95 billion.

Operations: BHP Group Limited generates revenue through its operations in Australia, Europe, Asia, and the Americas.

Dividend Yield: 5.6%

BHP Group's dividend history is marked by volatility, with recent payments decreasing to US$0.50 per share for the six months ended December 2024. Despite this, dividends remain covered by earnings (65% payout ratio) and cash flows (71.5% cash payout ratio). The stock trades at a discount to its estimated fair value, although its dividend yield of 5.61% is below the top quartile in Australia. Recent leadership changes may influence future strategic direction.

• Navigate through the intricacies of BHP Group with our comprehensive dividend report here.

• In light of our recent valuation report, it seems possible that BHP Group is trading behind its estimated value.

New Hope

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: New Hope Corporation Limited is involved in the exploration, development, production, and processing of coal as well as oil and gas properties, with a market cap of A$3.76 billion.

Operations: New Hope Corporation Limited generates revenue primarily from its Coal Mining operations in New South Wales, which contribute A$1.56 billion, and from its Coal Mining activities in Queensland, including treasury and investments, which account for A$166.52 million.

Dividend Yield: 9.2%

New Hope offers a high dividend yield of 9.18%, ranking in the top 25% of Australian dividend payers, but its dividends are not well covered by free cash flows, with a cash payout ratio of 113.7%. While the payout ratio is reasonable at 69.3%, indicating coverage by earnings, dividends have been volatile over the past decade. The stock trades at a discount to fair value and has seen reduced profit margins compared to last year.

• Take a closer look at New Hope's potential here in our dividend report.

• The analysis detailed in our New Hope valuation report hints at an deflated share price compared to its estimated value.

SHAPE Australia

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: SHAPE Australia Corporation Limited operates in the construction, fitout, and refurbishment of commercial properties in Australia, with a market cap of A$250.39 million.

Operations: SHAPE Australia Corporation Limited generates revenue primarily from its Heavy Construction segment, amounting to A$839 million.

Dividend Yield: 6%

SHAPE Australia's dividend yield of 6.02% places it among the top 25% of Australian dividend payers, though its short three-year history reveals volatility and unreliability in payments. Despite a high payout ratio of 88.3%, dividends are covered by earnings and cash flows, with a cash payout ratio at 53.2%. Recent earnings growth supports this coverage, but the company's unstable dividend track record remains a concern for investors prioritizing consistent income streams.

• Unlock comprehensive insights into our analysis of SHAPE Australia stock in this dividend report.

• Insights from our recent valuation report point to the potential undervaluation of SHAPE Australia shares in the market.

Seize The Opportunity

• Reveal the 32 hidden gems among our Top ASX Dividend Stocks screener with a single click here.

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Looking For Alternative Opportunities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ASX:BHP ASX:NHC and ASX:SHA.

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