These ASX shares pay you to own them

Some ASX shares pay investors to own them. Here's how that works.

| More on:
A businesswoman weighs up the stack of cash she receives, with the pile in one hand significantly more than the other hand.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • There aren't too many things in this world that pay you to own them
  • But ASX dividend shares certainly do
  • We look at passive income from capital in ASX shares

There aren't too many things in this world that pay you to own them. When you buy a new car, chances are that it's costing you money to own it. It would be a similar story with a pair of fresh kicks or a new 80-inch television. Good luck getting the money you have to pay for those goods back. But with ASX dividend shares, it's a whole different story.

If an ASX share pays a consistent dividend, it effectively pays its owner for the privilege of holding it. It is passive income, cash from capital, not labour.

The ASX is home to many, many shares that pay dividends. In fact, most ASX shares, especially those with mature business models, have paid a dividend at least once in their history, if not most years.

Perhaps the most famous dividend payers on the share market are ASX bank shares. The big four banks have long dominated the ASX boards – both in terms of sheer size as well as dividends. Right now, Westpac Banking Corp (ASX: WBC) has a trailing yield of 4.81% on the table. That stems from the last two dividends it has paid shareholders. Those were a 58 cents per share interim dividend last June, and a 60 cents per share final payment that was doled out in November. Next month, Westpac will pay an increased interim dividend of 61 cents per share.

It pays to own ASX dividend shares…

But few ASX shares can match the dividend prowess of Washington H. Soul Pattinson and Co Ltd (ASX: SOL). Soul Patts has been around for more than a century. But today, it holds the distinction of being the only ASX share that has paid a growing dividend for more than 20 years in a row. Yes, Soul Patts has given its investors an annual dividend pay rise every year since 2000. So not only have Soul Patts shareholders had to do nothing to receive a cash payment every six months, each year since 2000 has seen them receive more cash than the year before.

Soul Patts doesn't have the largest dividend yield on offer today at 2.41%. But there are dividend shares on the ASX right now that offer trailing yields far higher.

Super Retail Group Ltd (ASX: SUL) is the company behind famous retail names like Super Cheap Auto, Rebel and BCF. It may not have the dividend royalty status of Soul Patts. But on current pricing, this dividend payer offers a trailing yield of 8.2%. That means investors have gotten more than 8 cents in the dollar back from their investment over the past 12 months. If you include the value of the full franking credits Super Retail typically includes with its dividends, this rises to 11.7 cents in every dollar.

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

$100 Australian notes on top of each other.
Dividend Investing

These buy-rated ASX dividend stocks offer 7%+ yields

Analysts expect these buy-rated stocks to provide income investors with big yields.

Read more »

Happy man holding Australian dollar notes, representing dividends.
Dividend Investing

3 outstanding ASX dividend shares to buy next week

Analysts are tipping these shares to offer big returns over the next 12 months.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant
Dividend Investing

Should I buy Santos shares for dividend income?

Santos shares have been steadily upping their dividends since 2020.

Read more »

A businessman lights up the fifth star in a lineup, indicating positive share price for a top performer
Dividend Investing

2 of the best ASX dividend shares to buy in December

Bell Potter rates these dividend shares very highly. Let's see why.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

Analysts expect 5% to 8% dividend yields from these ASX stocks

Here's why these dividend stocks could be great options for income investors today.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
Dividend Investing

5 ASX 200 shares with ex-dividend dates next week

Do you own any of these shares that are primed to pay out?

Read more »

A couple makes silly chip moustache faces and take a selfie on their phone.
Dividend Investing

Invested $5,000 in Telstra shares in 2021? Here's how much passive income you've already earned

Atop the share price gains, how much passive income have investors earned from their Telstra stock?

Read more »

Happy couple enjoying ice cream in retirement.
Dividend Investing

Buy Telstra and this ASX dividend stock now

Analysts are saying good things about these dividend stocks. Let's see why they are bullish.

Read more »