If, like Mariah, you don't want a lot for Christmas and don't care about presents underneath the tree, why not spend some of your hard-earned cash on ASX dividend shares instead?
In contrast to gifts that may break or be quickly forgotten, an investment in some high-quality ASX dividend stocks has the potential to spread joy for decades.
In fact, building up a portfolio of reliable dividend payers now could help set you up with the passive income stream you need to retire early. Name a better present for yourself and your family than that!
To get into the spirit, we asked our Foolish writers to provide their recommendations on some jolly-good ASX dividend shares to buy now and hold for at least the next 20 Christmases.
Here is what the team came up with:
6 best ASX dividend shares for December 2024 (smallest to largest)
- NIB Holdings Limited (ASX: NHF), $2.66 billion
- TechnologyOne Ltd (ASX: TNE), $10.21 billion
- Washington H Soul Pattinson & Company Ltd (ASX: SOL), $12.75 billion
- Macquarie Group Ltd (ASX: MQG), $88.81 billion
- National Australia Bank Ltd (ASX: NAB), $120.07 billion
- CSL Ltd (ASX: CSL), $137.10 billion
(Market capitalisations as of market close 4 December 2024)
Why our Fool writers love these passive-income ASX stocks
NIB Holdings Limited
What it does: NIB's origin story dates back to 2007, when a private health fund for BHP Group Ltd (ASX: BHP)'s Newcastle Steelworks employees was demutualised. Since then, the green and white branded insurer has grown into a formidable force in the Aussie and New Zealand markets.
By Mitchell Lawler: The Australian health insurer has, in the melodic words of Pete Murray, 'seen better days'. Down a devastating 26% this calendar year, there's no reason to be doing a boot-scooting boogie when it comes to the company's share price.
However, NIB's business still looks solid. Policyholder growth is strong, net margins for FY25 are expected to be between 6% and 7%, and the industry remains rather defensive. To top it off, the insurer offers a 5.3% dividend yield before franking (and it's fully franked!).
Those franking credits can come in handy. Especially when we're talking about holding onto an investment for 20 years, which would take many of us into retirement.
Motley Fool contributor Mitchell Lawler does not own shares of NIB Holdings Limited.
TechnologyOne Ltd
What it does: TechnologyOne is an ASX tech stock that specialises in providing enterprise software products and IT infrastructure services.
By Sebastian Bowen: If you're investing in a dividend share that you plan to hold for at least two decades, I think the best course of action is to look beyond the obvious names. Most of the ASX's established dividend payers offer high yields upfront but very little in the way of dividend growth. TechnologyOne is a company that offers the opposite.
At face value, this stock's present sub-1% yield may not look like much. But TechnologyOne has been slowly and steadily raising its annual payouts for the past decade. Back in 2014, shareholders banked just 6.2 cents in annual dividends per share. But this year, that annual payout had more than tripled from 2014's levels to 22.4 cents per share.
If an investor buys TechnologyOne shares today, I think there's a good chance they'll be getting a monstrous dividend yield on their cost by the time 2044 rolls around.
Motley Fool contributor Sebastian Bowen does not own shares of TechnologyOne Ltd.
Washington H Soul Pattinson & Company Ltd
What it does: Soul Patts is an investment conglomerate that invests across a wide array of ASX shares and industries.
By Tristan Harrison: Soul Patts is one of the oldest businesses on the ASX. It has been operating and listed for 120 years and, as such, has already displayed excellent longevity. I think its flexible investment mandate will ensure it sticks around for at least the next two decades. And unlike other companies like banks and supermarkets, it can pivot its portfolio to new industries.
I'm a fan of Soul Patts' private equity portfolio, which owns several impressive businesses that could grow profit significantly in the coming years. These businesses are involved in everything from swimming schools and through to electrification, agriculture, and financial services.
I am also excited by the growth potential of some of Soul Patts' listed holdings, including Asian telco Tuas Ltd (ASX: TUA) and the uranium business Nexgen Energy (Canada) CDI (ASX: NXG). They could become much larger businesses in the next five years.
Turning to the dividend, Soul Patts has an excellent track record. It has grown its annual ordinary dividend every year since 2000, which is the longest growth streak on the ASX. It currently offers a grossed-up dividend yield of approximately 4%, including franking credits.
Motley Fool contributor Tristan Harrison owns shares of Washington H Soul Pattinson and Company Ltd and Tuas Ltd.
Macquarie Group Ltd
What it does: Macquarie is an international investment bank specialising in several markets including commercial banking, capital markets, commodities, asset management, and infrastructure.
By Zach Bristow: Macquarie's diversified revenue stream is appealing in a world of uncertainty. Each of its core segments has hard-to-replicate business advantages, in my opinion
When inflation and interest rates rise, this hurts fees in Macquarie's banking division. But at the same time, profits from the company's commodities division then tend to shift higher. The result is a form of 'recession-proof earnings' that are somewhat buffered from hard swings in the business cycle.
For instance, in FY22, when the economy and many businesses cut dividends after feeling the effects of hot-running inflation, Macquarie paid dividends of $6.50 per share, 7% above the prior period, and 21% growth from FY18.
According to CommSec, consensus projects a $6.50 total FY25 dividend, stretching up to $7.20 per share the following year. If delivered, this represents 10% to 11% income growth at a 3.1% starting yield.
In the last 12 months, Macquarie paid $6.45 per share in dividends. Zooming out, the bank has grown its dividend by an average of 12% per year since 2010, when it paid $1.30 apiece.
Motley Fool contributor Zach Bristow does not own shares of Macquarie Group Ltd.
National Australia Bank Ltd
What it does: Founded in 1982, NAB now counts as the second-largest of the big four Australian banks in terms of market capitalisation. Most of NAB's financial service businesses operate in Australia and New Zealand. NAB also has operations in Asia, the United Kingdom, and the United States.
By Bernd Struben: NAB's dividend payouts have edged higher every year since 2020. That's the kind of trend I like to see. While there are likely to be a few rough patches over the next 20 years, I believe NAB can continue to broadly grow those dividend payments.
The bank stock trades at a significant discount to its larger rival, Commonwealth Bank of Australia (ASX: CBA), in terms of its price-to-earnings (P/E) ratio. And NAB has a dividend payout ratio target in the range of 65% to 75% of cash earnings.
For FY 2024, NAB reported cash earnings of $7.1 billion. The bank's 85 cents per share fully franked final dividend (up 1.2% from the prior year) represented a cash earnings payout ratio of 73.7%.
Over the full year, NAB delivered $1.69 per share in dividends. At the recent closing price of $39.06, the stock trades on a fully franked trailing yield of 4.3%.
NAB shares have also gained 36% over the past year.
Motley Fool contributor Bernd Struben does not own shares of National Australia Bank Ltd.
CSL Ltd
What it does: CSL is a global biotechnology company with a portfolio of lifesaving medicines, including those that treat hemophilia and immune deficiencies, vaccines to prevent influenza, and therapies in iron deficiency and nephrology.
By James Mickleboro: When investing for the long term, I think a focus on quality is needed. And with CSL a real candidate for Australia's highest-quality company, it ticks all the boxes for an ASX stock to buy and hold for 20 years, in my view.
In addition, now could be an opportune time to pick up the global biotechnology company's shares. After going nowhere for a couple of years due to post-COVID headwinds, a number of analysts believe CSL shares could be about to take off as the company delivers double-digit earnings growth each year for the next few years.
Bell Potter recently initiated coverage on CSL with a buy rating and $345.00 price target. It believes the "stock looks undervalued on a PE ratio 18%/8% below 5yr/10yr historical averages and is set for double-digit earnings growth driven by the core Behring division."
Motley Fool contributor James Mickleboro owns shares of CSL Ltd.
