10 best ASX dividend stocks and income ETFs for 2027

Each year, Canada’s Banque Nationale updates its “Dividend All-Stars” list, a model portfolio featuring Toronto-listed stocks it believes offer a combination of attractive capital growth and income.

The portfolio has returned a market-beating 14.4% p.a. in the 14 years since the bank launched it. From my reading, one of the key reasons is that its stock pickers aren’t afraid to lock in profits when a company hits its price target or move on when the underlying fundamentals change. As such it's not a "set and forget" list - the stars need to, well, keep starring!

Capital growth and income are the two things Livewire readers told us they’re prioritising over the next 12 months. So I had an epiphany. Why not borrow this great idea from the Canucks and Australianise it for our readers?

Et voilà! Meet the Livewire ASX Dividend Rockstars list ('the Rockstars'), a thought experiment that aims to deliver both capital growth and income.

How it works

• Five fundies, two picks each. The Rockstars start with 10 equally weighted positions. We’ve given our fundies a wider remit. They can choose shares, fixed income securities or ETFs, as long as they’re listed on the ASX.
• Each fundie brings their own process. The Canadians look for an attractive yield, sustainable or rising dividends and scope for capital growth. We’re playing to Livewire’s strengths by asking each fundie to use their own process and share the thinking behind their picks.
• The picks can change. The fundies can lock in profits or swap out a pick if their view changes. We’ll publish an update when they do, and the original pick’s performance up to the swap will still count.
• We’ll keep score on Sharesight. We’ll track capital gains and losses, dividends and distributions, and franking credits.

We’ll compare the results with what we think is the go-to benchmark for dividend investing in Australia, the Vanguard Australian Shares High Yield ETF (ASX: VHY).

And most importantly, there are bragging rights on the line. At the end of each 12-month period, we’ll crown the best-performing team Livewire’s Dividend Rockstar of the year. Then we’ll sit down with them to hear which calls paid off, what surprised them and where they’re looking for income next.

Without further ado, here are the Rockstars’ picks.

Disclaimer: The Livewire ASX Dividend Rockstars portfolio is a thought experiment. The picks are for discussion and do not constitute recommendations to buy, hold or sell any investment.

Charles Casey, Solaris Investment Management

The income investing checklist

The Solaris investment approach for income is grounded in fundamental research, forecasting the franked dividend yield and capital growth for over 200 ASX-listed companies. We don’t rely on historical dividend yields and use our research to:

• Assess the ability and willingness of companies to pay growing dividends and special dividends.
• Forecast cash flows, balance sheet settings and franking account balances.
• Focus on management and board strategy with respect to capital management.

This research provides a competitive advantage in creating a portfolio of listed companies designed to deliver growing income streams.

Coles Group (ASX: COL)

Coles is a ‘dividend rockstar’, having grown its dividend every year since listing on the ASX in 2019. It’s an impressive feat to grow dividends through the COVID-19 pandemic, the RBA hiking cycle in 2022 and a period of high inflation. 

This highlights the resilience of Coles’s business model, the rational industry structure it operates in and the willingness of the board to return surplus franked capital to shareholders. 

Based on our forecasts, Coles has the potential to grow its dividend by 25% over the next three years.

South32 (ASX: S32)

South32 has the potential to deliver significantly higher dividends into 2027, supported by the pending sale of its aluminium division, its net cash balance sheet and over $1 billion of surplus franking credits. 

Following the sale of the aluminium business, South32 has a focused portfolio of growth assets across in-demand metals including copper, zinc and silver. The company has a track record of returning surplus capital to shareholders, supporting the outlook for dividends into 2027.

Dr Phil Hofflin and Tim Zhao, Lazard Asset Management

The income investing checklist

• A dividend yield that should usually exceed the market average and the cash rate.
• The sustainability of this level of dividends.
• Capital upside in the overall valuation of the stock.

In practice, there are clearly trade-offs between the up-front yield and the capital upside.

Woodside Energy (ASX: WDS)

Woodside is a high-quality income opportunity, offering a fully franked dividend yield of about 5.1% (7.2% gross) backed by a strong balance sheet and significant free cash flow. 

As an energy company, spot earnings will depend on commodity prices, but Woodside is a low-cost producer with EBITDA margins of about 70%, even better than the Pilbara iron ore majors. 

Dividend sustainability to 2030 will be supported by the completion of Scarborough and later Louisiana LNG. As capital expenditure falls, a greater share of operating cash flow will become available for shareholder returns.

We remain constructive on the near-term outlook for energy markets, with tight oil and gas balances and ongoing restocking demand supporting prices. At current levels, Woodside offers both an attractive income stream and capital upside. Potential catalysts include the divestment of Beaumont New Ammonia and a sell-down of Louisiana LNG, both of which could further enhance capital management options.

EBOS Group (ASX: EBO)

As value-oriented investors, we often look at unloved or overlooked companies. In EBOS’s case, the loss of the Chemist Warehouse wholesale supply contract caused concern that the company might not be able to replenish these fast-growing earnings. 

The fall in share price has made this an interesting investment. EBOS trades at only 12.5 times forward earnings per share, near the lowest point of its 12-year trading history. It pays a 5% fully franked dividend, based on our conservative expectations of this year’s dividends.

With its major distribution centre renewal program completed, capex is declining, freeing up cash for the future. EBOS has a strong market position (No. 1 or No. 2) in a sector supported by a growing population, demographics and exposure to higher-value medicines including GLP-1s.

Cameron Gleeson, Betashares

The income investing checklist

When it comes to hunting for dividends on the ASX, my key criteria and rules are:

• Use forward-looking dividend information, like analyst consensus dividend estimates, rather than relying on historical dividends. High trailing yields may be artificially inflated by recent share price declines, which makes backward-looking screens prone to ‘dividend traps’.
• Exclude stocks with excessively high forecast dividend yields, as they may reflect stale information and signal dividend sustainability risk.
• Avoid dividend payers with poor share price momentum. A falling share price may be a red flag that can help investors avoid ‘catching a falling knife’.
• Consider what a dividend stock contributes to both your portfolio’s yield and its volatility. Is the income uplift from each stock justified from a risk perspective?
• Hold a diversified portfolio of dividend stocks, rather than leaning too heavily on a small handful of names.

Betashares S&P Australian Shares High Yield ETF (ASX: HYLD)

HYLD is essentially my dividend checklist built into an index. It’s a portfolio of 50 dividend stocks built using analysts’ forecast dividends, removing stocks with excessively high forecast yields, those in the bottom 10% for price momentum, and the bottom third when ranked by forecast yield relative to volatility. 

Those screens excluded CBA last year when its shrinking yield meant the stock did not make the cut on a risk-adjusted basis.

The ASX 200’s dividend yield, at around 3.3%, sits well below its long-run average, with more than half of its income coming from just ten stocks. Reaching for yield in that environment is how investors can end up in dividend traps.

HYLD’s 12-month distribution yield is 4.3%, or 5.3% grossed up for franking, paid monthly. Since listing in August 2025, it has returned 14.5% p.a., against 5.2% for the ASX 200.

Betashares Global Royalties ETF (ASX: ROYL)

Many income portfolios lean heavily on Australian banks and miners. ROYL offers something different. It holds 46 global companies that collect royalties on mines, oil fields, drug patents, chip designs and music catalogues, including Arm Holdings, Franco-Nevada, Royalty Pharma and Universal Music Group. A royalty owner takes a cut of revenue. Running the business is someone else’s problem.

It fits my checklist. Income comes from five different industries, and the yield is high without being stretched. Momentum is strong, with ROYL returning 21.7% p.a. over three years. 

Royalties also tend to rise with prices, which in my view makes the business model more resilient to inflation. 

In 2022, for example, ROYL’s index rose 22.5% while inflation pushed global shares and bonds lower. ROYL has paid 22 consecutive monthly distributions, with those monthly payments up 15% since January 2025, and its 12-month distribution yield is 5.3%.

Ben Clark, TMS Capital

The income investing checklist

• Balance sheet strength. The company must be able to service its debt comfortably. If debt repayment becomes the priority, dividends could be cut.
• Resilient earnings. Understand the business and its earnings profile. Sustainable dividends depend on sustainable profits.
• A sustainable payout ratio. Be wary of companies distributing too much of their earnings. An attractive dividend today may prove unsustainable.

Ramsay Health Care preference shares (ASX: RHCPA)

RHCPA is one of our biggest domestic holdings and has been one of our most boring and best investments. These perpetual preference shares pay a coupon of 4.85% above the 180-day bank bill swap rate. 

At a purchase price of $108, the income return is approximately 9.3% based on the 180-day BBSW (bank bill swap rate) of 5.28%.

Ramsay’s improving operating outlook supports confidence in its ability to service these securities. They have never missed a coupon throughout our holding period.

The key risk is capital loss if they are bought back at their $100 face value, potentially following a takeover or refinancing, but we think that's unlikely. The yield can also fluctuate based on bond market pricing.

As such, the longer the securities remain outstanding and continue paying income, the more opportunity investors have to offset that potential loss and generate an attractive cashflow.

Deterra Royalties (ASX: DRR)

We have owned Deterra since its demerger from Iluka. Over approximately five years, it has returned $2.15 per share in cash and franking credits, roughly half our original investment, with the share price still around our starting level.

Its main income source is a revenue-based royalty over BHP’s Mining Area C iron ore operations. A revenue royalty reduces exposure to the mine’s operating costs and avoids some of the accounting disputes associated with profit-based royalties.

The forward dividend yield is approximately 6.2%, fully franked, or nearly 9% including franking credits. A 75% payout ratio provides a buffer, while additional royalty streams offer diversification potential.

The main risk is iron ore prices. Weaker prices reduce royalty revenue and could result in lower dividends. Investors should expect some income variability.

Michael Price, Ausbil

The income investing checklist

• Exposure to top-down investment themes based on our analysis of global macroeconomic conditions.
• Earnings growth and positive expected earnings revisions from our team of research analysts.
• Total expected return (income plus growth) ahead of the market.
• Dividends (ideally fully franked).

Ausbil Active Dividend Income Fund (ASX: DIVI)

DIVI provides access to the Ausbil Active Dividend Income Fund through an active ETF that pays a monthly distribution. The fund has provided an annual grossed-up yield of over 7%, including franking credits, since its inception in June 2018. It has outperformed its benchmark, the S&P/ASX 200 Accumulation Index, and the majority of large-cap Australian equity funds¹ since inception², while providing that additional income.

It provides exposure to a diversified portfolio of 40–50 dividend-paying companies that Ausbil expects to outperform the total market and uses active dividend investing to collect additional dividends over the year and provide more of the return in the form of income.

¹ Based on the Mercer Survey.
² The fund’s inception date is 30 June 2018.

Qantas Airways (ASX: QAN)

At first glance, Qantas may appear to be exposed to high fuel prices and a slowing domestic economy being hit by increasing interest rates. However, in 12 months’ time we believe these headwinds will have changed to tailwinds (pun intended), with significantly lower fuel prices and interest rate cuts on the horizon for Australia. We will also have just seen the first non-stop commercial flights between Sydney and London that we expect to be highly profitable.

While earnings are expected to be flat at best over the next 12 months, we expect FY28 earnings to be at least 50% higher. With a fully franked dividend yield of 4.2% in the meantime, this is a very attractive investment proposition.

The 10 Rockstars picks at a glance

Across the 10 picks, we have a mix of sectors and a range of ways to earn income and pursue capital growth.

• The two highest yields come with different risks. Ben Clark’s Deterra Royalties leads the lineup at 6.22%, followed by Ramsay Health Care’s preference shares at 5.90%. Deterra’s dividend depends heavily on iron ore royalties. Ramsay’s preference shares pay a floating coupon, but investors could take a capital loss if they’re bought back below our entry price.
• The picks draw income from different places. Betashares’ Global Royalties ETF adds international exposure and yields 5.30% with no franking. Coles starts at 3.60%, fully franked, with Solaris making the case for dividend growth. 
• The Rockstars start with a yield advantage. At equal starting weights, the portfolio has a 4.80% trailing 12-month yield, compared with 3.63% for the Vanguard Australian Shares High Yield ETF (ASX: VHY). Both are approximately 82% franked. Assuming a 30% company tax rate, that puts the estimated grossed-up yields at 6.48% for the Rockstars and 4.91% for VHY.

That’s where we start. We’ll keep you posted on what the picks actually pay out, how the portfolio’s total return stacks up against Vanguard and what prompts the fundies to make a change along the way.