5.2% dividend yield? I'm buying this stellar ASX stock in bulk

I've been buying this stock for its monthly dividends…

| More on:
Different Australian dollar notes in the palm of two hands, symbolising dividends.

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

One of the ASX shares I've been buying most enthusiastically over the past year or two offers investors a rather bulky dividend yield today. As you may have gleaned from the headline, that dividend yield currently sits at a robust 5.24%.

That hefty yield also tends to come with full franking credits attached, meaning that, in grossed-up terms, a yield as high as 7.49% is potentially on the table when accounting for the value of those franking credits.

The ASX share in question is none other than Plato Income Maximiser Ltd (ASX: PL8). Plato Income Maximiser is a listed investment company (LIC) that specialises in providing consistently high (and fully franked) income to its shareholders. It does so with the regular payment of monthly dividends, which is a rather rare thing on the ASX.

Like most LICs, Plato Income Maximiser owns an underlying portfolio of assets (in this case, ASX shares), which it manages on behalf of its shareholders.

As one would expect, these shares are all ASX dividend heavyweights, including the likes of ANZ Group Holdings Ltd (ASX: ANZ), Fortescue Ltd (ASX: FMG), Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Medibank Private Ltd (ASX: MPL).

Over the past 12 months, Plato shares have paid out 12 monthly dividends, each worth 0.55 cents per share. That has resulted in an annual dividend total per share of 6.6 cents. With the Plato share price of $1.26 at the time of writing, this gives the company a trailing dividend yield of 5.24%.

Why do I keep buying this ASX stock for its dividend yield?

It goes without saying that bagging an investment with a 5.24% dividend yield is appealing in itself.

However, there are other reasons I find this particular investment attractive. Firstly, I have confidence that Plato's management team will be able to maintain dividend payments at a relatively consistent level going forward, thanks to the company's robust stock-picking criteria.

As such, I don't worry about a dividend cut from Plato in the same way I worry about the income reliability of some of my other ASX dividend shares.

Secondly, the monthly dividend cash flow from this company is also appealing. Having a large dividend cheque arrive like clockwork every month is a fantastic benefit this company brings to my portfolio. Every month, I have the wonderful choice of whether to save that influx of cash, or to redeploy it into other dividend-paying ASX shares.

So I'm happy to keep buying Plato Income Maximiser. And if this company experiences a meaningful share price dip, I will regard it as a lucrative buying opportunity to secure an even higher dividend yield.

Should you invest $1,000 in Mineral Resources Limited right now?

Before you buy Mineral Resources Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Mineral Resources Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 6 March 2025

Motley Fool contributor Sebastian Bowen has positions in Plato Income Maximiser and Telstra Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. 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

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Dividend Investing

Dividend reinvestment plans deliver big discounts on Wisetech, Bendigo Bank, and Woolworths shares

Wisetech, Bendigo Bank, and Woolworths have announced their dividend reinvestment plan share prices.

Read more »

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

How to earn $50,000 of passive income from ASX shares

The share market can be used by investors to generate significant income. Here's how.

Read more »

REIT written with images circling it and a man touching it.
Dividend Investing

2 ASX shares with dividend yields above 6%

These businesses could be resilient distribution payers.

Read more »

A woman sets flowers on a side table in a beautifully furnished bedroom.
Dividend Investing

This ASX dividend stock is projected to pay a 12% yield by 2027

This business is projected to unleash large dividends to investors

Read more »

Person holding Australian dollar notes, symbolising dividends.
Dividend Investing

Market selloff? Here's why income investors should be buying ASX dividend shares

Dividend shares could be a great way to grow wealth after a selloff.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Dividend Investing

Why BHP and this ASX dividend stock could rise 20%+

It isn't just growth shares that could deliver big returns. Analysts think these income stocks could too.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Forget term deposits and buy these ASX dividend shares

Analysts think these high-yield shares could be top picks for income investors.

Read more »

Group of people cheer around tablets in office
Dividend Investing

Brokers say these 3 ASX dividend shares are top buys

Let's see why they think these shares could be buys for income investors right now.

Read more »