As Christmas approaches, the Australian Securities Exchange has shown resilience with a notable bounce back, gaining 0.67% to reach 8,305 points. With sectors like Telecommunications, Real Estate, Financials, Industrials, and Health Care leading the charge upward by 1%, investors are keenly observing dividend stocks that offer stability and income potential in this dynamic market environment.

Top 10 Dividend Stocks In Australia

Click here to see the full list of 31 stocks from our Top ASX Dividend Stocks screener.

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

Ridley

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

Overview: Ridley Corporation Limited, with a market cap of A$856.20 million, operates in Australia providing animal nutrition solutions through its subsidiaries.

Operations: Ridley Corporation Limited generates revenue through its Bulk Stockfeeds segment, amounting to A$886.59 million, and its Packaged/Ingredients segment, which contributes A$376.31 million.

Dividend Yield: 3.5%

Ridley Corporation's dividend payments are reasonably covered by earnings with a payout ratio of 71.7% and well-supported by cash flows at 41.3%. Despite a history of volatility, dividends have grown over the past decade. However, its yield at 3.47% is lower than the top quartile in Australia. Recent board changes include Dan Masters joining as a non-executive director, potentially influencing strategic decisions that could impact future dividend stability and growth prospects.

• Take a closer look at Ridley's potential here in our dividend report.
• Our valuation report here indicates Ridley may be undervalued.

SHAPE Australia

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

Overview: SHAPE Australia Corporation Limited operates in the construction, fitout, and refurbishment of commercial properties across Australia with a market cap of A$235.47 million.

Operations: SHAPE Australia Corporation Limited generates revenue from its heavy construction segment, amounting to A$839 million.

Dividend Yield: 6.3%

SHAPE Australia's dividend yield of 6.34% places it among the top 25% in Australia, yet its payment history is volatile with a short track record. Dividends are covered by earnings (88.3%) and cash flows (53.2%), indicating sustainability despite volatility concerns. Trading below fair value enhances its appeal, though recent announcements about seeking acquisitions could impact future payouts as the company aims to diversify and create shareholder value through strategic growth initiatives.

• Click here to discover the nuances of SHAPE Australia with our detailed analytical dividend report.
• In light of our recent valuation report, it seems possible that SHAPE Australia is trading behind its estimated value.

Santos

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

Overview: Santos Limited is involved in the exploration, development, production, transportation, and marketing of hydrocarbons in Australia and Papua New Guinea with a market cap of A$20.96 billion.

Operations: Santos Limited's revenue is primarily derived from its operations in Papua New Guinea ($2.71 billion), Queensland & NSW ($1.31 billion), Western Australia ($881 million), Cooper Basin ($612 million), and Northern Australia & Timor-Leste ($84 million).

Dividend Yield: 7.4%

Santos offers a high dividend yield of 7.42%, ranking in the top 25% among Australian dividend payers, yet its dividends have been unreliable and volatile over the past decade. While earnings cover the payout ratio of 78.4%, free cash flow coverage is inadequate with a cash payout ratio of 164.4%. Despite trading significantly below estimated fair value, recent executive changes and growth forecasts may influence future dividend stability and sustainability.

• Dive into the specifics of Santos here with our thorough dividend report.
• According our valuation report, there's an indication that Santos' share price might be on the cheaper side.

Summing It All Up

• Access the full spectrum of 31 Top ASX Dividend Stocks by clicking on this link.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
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Searching for a Fresh Perspective?

• 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:RIC ASX:SHA and ASX:STO.

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