Best Dividend Stocks for 2027
Here’s our look at some of the Australian shares worth watching for dividend income heading into 2027. Australian investors have traditionally had access to some of the strongest dividend-paying companies in the world, particularly across banking, mining, energy and telecommunications.
The added benefit of franking credits can also make Australian dividends particularly attractive for eligible investors. But the highest dividend yield is not always the best dividend investment. A strong dividend stock ideally combines sustainable cash flow, a healthy balance sheet, a sensible payout ratio and the ability to maintain or grow its dividend over time.
What Makes a Good Dividend Stock?
When looking at dividend shares, investors should consider:
- Dividend yield
- Franking level
- Dividend sustainability
- Earnings and cash flow
- Balance-sheet strength
- Payout ratio
- Industry outlook
- Potential for capital growth
- History of dividend payments
A very high dividend yield can sometimes be a warning sign rather than an opportunity.
For 2027, our preference is therefore for companies where the dividend is supported by a substantial underlying business.
BHP Group – BHP.ASX
- Sector: Resources
- Dividend frequency: Twice yearly
- Franking: Typically fully franked
- Investment profile: Income + resources exposure
BHP remains one of Australia’s most important dividend-paying companies. The world’s largest listed mining company generates substantial cash flow from iron ore, copper and other commodities, allowing it to return significant amounts of capital to shareholders.
For FY26, BHP declared total dividends of US$1.72 per share, including a final dividend of US$0.99, with the final payout representing approximately 72% of underlying attributable profit. What makes BHP particularly interesting heading into 2027 is the changing composition of the business.
Copper contributed more than half of underlying EBITDA in FY26 for the first time, and BHP says its development pipeline could increase copper production by approximately 40% by FY35. That gives investors exposure not only to traditional mining income but also to increasing global demand for copper from electrification, renewable energy, data centres and infrastructure.
Best for: Investors looking for dividend income combined with long-term exposure to global commodity demand.
What to watch: Commodity prices can move significantly, so BHP’s dividend will naturally vary from year to year.
National Australia Bank – NAB.ASX
- Sector: Banking
- Dividend frequency: Twice yearly
- Franking: Fully franked
- Investment profile: Income
Australia’s major banks remain central to many dividend portfolios. NAB paid an interim dividend of 85 cents per share in 2026, fully franked, following fully franked dividends of 85 cents for both halves of FY25.
The attraction of NAB is relatively straightforward. The bank generates substantial recurring earnings from Australian business and consumer banking and has historically returned a large proportion of those profits to shareholders. For investors focused on income, the combination of cash dividends and franking credits can make Australian bank shares particularly attractive.
Best for: Investors wanting reliable Australian banking exposure and franked dividend income.
What to watch: Bank profitability can be affected by:
- Interest-rate changes
- Housing-market conditions
- Bad debts
- Competition for deposits
- Regulatory capital requirements
Australian investors should also be careful about becoming overly concentrated in bank shares.
Telstra Group – TLS.ASX
- Sector: Telecommunications
- Dividend frequency: Twice yearly
- Investment profile: Defensive income
- Dividend strategy: Sustainable and growing dividend
Telstra has gradually rebuilt its reputation as an income investment. For FY26, Telstra paid 10.5 cents per share at both the interim and final stages, taking the annual dividend to 21 cents per share.
Of each FY26 dividend, 9.5 cents was franked and one cent was unfranked, the underlying business has also been improving. Telstra’s first-half FY26 underlying EBITDAaL rose 5.5%, cash EPS increased 20%, and the company continues to target mid-single-digit growth in cash earnings under its Connected Future 30 strategy. Telecommunications also tends to be less cyclical than resources, making Telstra useful as a different type of income exposure.
Best for: Investors seeking a more defensive dividend stock with relatively predictable recurring revenue.
What to watch: Telstra still faces competition, large infrastructure requirements and challenges in parts of its enterprise business.
Woodside Energy – WDS.ASX
- Sector: Energy
- Dividend frequency: Twice yearly
- Franking: Currently fully franked
- Investment profile: Higher-income energy exposure
Woodside can provide some of the strongest cash distributions among major Australian companies when energy markets are supportive.
Its 2026 interim dividend was US57 cents per share, equivalent to approximately 79.6 Australian cents at the conversion rate used, and was 100% franked. Woodside’s dividend policy targets a payout of approximately 50% to 80% of underlying NPAT, with a minimum target of 50%.
That can produce attractive income when oil and LNG markets are strong. The trade-off is that Woodside’s dividends can vary significantly as energy prices and project expenditure change.
Best for: Investors comfortable with commodity volatility who want potentially higher dividend income and exposure to global energy markets.
What to watch: Oil and LNG prices, major-project spending and the global energy transition can all materially affect Woodside’s earnings and dividends.
Comparing ASX Dividend Stocks
| Stock | Sector | Income Potential | Franking | Dividend Stability | Risk |
| BHP | Mining | ⭐⭐⭐⭐⭐ | High | ⭐⭐⭐ | Medium–Higher |
| NAB | Banking | ⭐⭐⭐⭐⭐ | High | ⭐⭐⭐⭐ | Medium |
| Telstra | Telecommunications | ⭐⭐⭐⭐ | High | ⭐⭐⭐⭐⭐ | Medium |
| Woodside | Energy | ⭐⭐⭐⭐⭐ | High | ⭐⭐⭐ | Higher |
How to build a dividend Share portfolio
Rather than putting all of an income portfolio into one sector, investors can spread exposure across different parts of the Australian economy.
For example:
- Banks – recurring income and franking credits
- Resources – stronger cash flow when commodity markets are supportive
- Energy – potentially high income but greater volatility
- Telecommunications – more defensive recurring earnings
An investor might therefore own companies such as: BHP (BHP.ASX) + NAB (NAB.ASX)+ Telstra (TLS.ASX) + Woodside (WDS.ASX) rather than relying entirely on four Australian banks or several mining companies. Diversification matters because different industries generate profits at different points of the economic cycle.
Investing for income and impact
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That means your investment activity can help:
- Generate investment income
- Build long-term wealth
- Diversify your portfolio
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Your investments remain yours. We simply believe some of the revenue generated from investing can also be used to create positive social impact.
Dividend Stocks vs Dividend ETFs
Individual shares offer investors greater control. You decide exactly which businesses you own. That can potentially deliver higher income or stronger capital growth than an ETF, but it also means greater company-specific risk.
Dividend ETFs can provide instant diversification, while individual dividend shares allow investors to construct their own portfolio. Neither approach is inherently better, many investors use a combination of both.
Dividend Stock Risks
Dividend shares still carry investment risk. Investors should remember:
- Dividends are never guaranteed
- Companies can reduce or suspend dividends
- Share prices can fall
- High yields can sometimes signal financial problems
- Commodity-company earnings can be volatile
- Banks can be affected by economic downturns and bad debts
- Franking levels can change
The goal should not simply be to find the highest yield. The quality and sustainability of the underlying earnings matter just as much.
The Bottom Line
For investors looking for dividend income heading into 2027, BHP, NAB, Telstra and Woodside each provide a different type of income exposure.
- BHP combines dividends with increasing exposure to copper and global resources.
- NAB provides traditional Australian bank income and fully franked dividends.
- Telstra offers a more defensive earnings profile and a stated objective of maintaining a sustainable and growing dividend.
- Woodside can provide higher income but comes with greater commodity-price volatility.
A diversified dividend portfolio can combine these different characteristics rather than simply chasing whichever company currently has the highest yield.
Important disclaimer: The companies discussed above are examples only and are not investment recommendations. The information is general in nature and does not take into account your personal financial circumstances, objectives or needs. Dividend payments, franking levels, company earnings and share prices can change. Investors should conduct their own research and consider seeking professional financial advice before investing.
Past performance is not a reliable indicator of future performance.
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