Buy Hold Sell: 5 stocks with growing dividends

There are two things you want out of a good income stock - a solid yield and the ability to grow that yield over time. 

In this episode of Buy Hold Sell, Livewire's Chris Conway hosts Peter Gardner from Plato Asset Management and Sean Roger from Perpetual to run the ruler over five dividend stocks with better-than-market yields and expected dividend growth.

We ran a screen that filtered companies with a market cap above $1 billion, offering a one-year forward yield of more than 4% (better than the market) and projected dividend growth based on consensus earnings forecasts.

The screen threw up some interesting names across consumer discretionary, financial services and transport, but are these stocks worth adding to your watchlist, according to the pros? Find out below. 

This video was filmed on Wednesday, 25 February 2026.

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Edited transcript

Chris Conway: Hello and welcome to Livewire's Buy Hold Sell. My name is Chris Conway. Great income stocks not only pay a reasonable yield, but they grow that yield over time. Today we're running the ruler over five stocks with above-average yield, so better than the market and that are expected to grow their dividends over the next couple of years. Helping me with that is Sean Roger from Perpetual and Peter Gardner from Plato. 

Ladies and gentlemen, the way that we found these stocks is I ran a little screen for a market cap above a billion dollars, one-year forward yield above 4%, so better than the market, as I said, and dividend per share growth expected over the next couple of years. 

Aurizon Holdings (ASX: AZJ)

The first name to make the cut is Aurizon. Sean, I'll come to you, buy, hold or sell?

Sean Roger (SELL): I'll say sell. I think their below-rail coal businesses is a high quality asset. I guess the concern or the question mark we've got is the rest of the business. I think the above-rail coal business has got about 50% of its contracted volumes up for expiry over the next two years. I think the environment's pretty competitive at the moment. And even if they do retain all of those volumes, there's a risk that you see the margin come under pressure as those contracts roll through. And I'm just not sure that's reflected in forecasts, if that does play through that way. A good example of that was Whitehaven, on their results call just recently, talk about the benefit they're going to get - I think it was $3 a tonne benefit from a new contract that's rolling starting 1st of July next year.

I think that's just evidence that there is a bit of pressure there on these contract rolls. So that's one thing we’re thinking about. And secondly is the above-rail bulk business, the One Rail acquisition still yet to prove that it's going to be able to earn an adequate return on capital. So the dividend yield is quite attractive, but a bit of leverage on the balance sheet and it's a pretty full payout ratio. So for us, given that early question mark around the coal business, just a little bit of uncertainty there for us so it's a sell.

Chris Conway: Pete, one year forward yield of 5.6%. So relatively juicy, up 26% over the last year. Buy hold or sell for you?

Peter Gardner (BUY): It's a buy for us at the moment. It's obviously one of those mining service contractors, but it's probably not our favourite mining service contractor that we've got. As Sean says there are some challenges kind in the next couple of years with redoing the contracting. But given the way that the mining business is going at the moment, it's on a decent yield that looks good value. It's forecast to grow, not by a lot, but mid single digits for the next couple of years, but given where the yield is, we think it looks decent value. So buy for us.

JB Hi-Fi (ASX: JBH)

Chris Conway: Next up, we'll talk one of Australia's favourite retailers, JB Hi-Fi. Haven't changed their stores in 20 years, but we still all go there and buy their stuff. One year forward yield of 4.35%, expected to grow. Solid results up 7% on the day thereof. Pete, I'll stay with you. Buy, hold or sell?

Peter Gardner (BUY): It's a buy for us. JB Hi-Fi has been under some pressure recently with the projected interest rate rises as inflation started going up at the end of last year. The share price started coming under pressure. But its sales have still remained pretty buoyant in that environment. Sales were up 7% in the last six months and then up 4% for January. So they have come off a little bit. But it's a category killer in that space. It's doing incredibly well. I think of it more of a consumer staples business at the moment. I think the last thing that most young people in particular are going to stop spending money on is their phone and their electronics. And so we think even in an interest rate increasing environment, it'll stay fairly buoyant.

Chris Conway: Sean, Pete alluded to it. Tough 12 months down 9% in terms of share price. Buy hold or sell for you.

Sean Roger (BUY): I'm going to agree with Pete and say Buy. I think the sectors that JB Hi-Fi is exposed to has a bit of a structural tailwind there. You've just got an ever-evolving new roadmap of new technology products coming out. If my household is anything to go by, each person seems to have more technology products per person. So ultimately, I think they're in pretty attractive categories in consumer electronics and small appliances. It does feel like Harvey Norman's got its mojo back a little bit in the last 12 months. So I think the competitive environment, there's probably not as much market share gains there as there was for JB Hi-Fi, but given its starting yield, very, very strong balance sheets. I think you'll probably see some specials there on top of the ordinary dividend. So for us, it's a buy as well.

Transurban Group (ASX: TCL)

Chris Conway: Next up, we'll talk Transurban, one year forward yield of 4.79%, again, expected to grow thereafter. Boring is beautiful, Sean. Buy, hold or sell?

Sean Roger (SELL): I'm going to say sell. Obviously a great set of concessions here in Australia. I think the pricing escalators embedded within those concessions provide really good inflation protection and ultimately growth for shareholders. You step back at the end of the day, what they own is concessions for toll roads and Transurban gears these up during the ownership of the concessions and then ultimately has to pay down that debt to hand back the concession at the end of the period. The company's done a fantastic job over the last 10 years, getting extensions to those concessions and also diversifying through acquisitions. But there's a couple of things that have popped up over the last few years that in our view may make it more difficult to replicate that in the future. The first one is the ACCC blocked them from making an acquisition in Melbourne.

And secondly, the toll review that's going on in New South Wales just sends a bit of a signal that the overall level of tolling has reached a point that maybe consumers are not overly happy with. So the dividend yield just under 5% is actually towards the upper end of where it's traded historically. But just those question marks around that medium to longer term ability for them to replicate what they've done historically makes it a sell for us.

Chris Conway: Pete, up 8% over the last 12 months. Buy, hold or sell for you?

Peter Gardner (HOLD): It's a hold for us. I agree with most of what Sean says but I think there's a few extra points worth noting. Its average concession life is 28 years, so it's got those assets for a very long period of time. So they will run off at some point, but that's a fair way down the track. It's on a 24x EBITDA multiple, which we think is probably reasonable for a stable business like it is. There are regulatory concerns, but there's not too much the governments can do because they've already negotiated those contracts and so they  have got to pay out Transurban if they want to try and reduce that tolling going forward. So we think it's a stable business, especially as everyone's worried about AI. Unless you think that we're all going to go into the metaverse and put our goggles on and no longer use roads going forward, we think that growth will continue going forward. But it's expensive, so it's a hold for us.

Computershare (ASX: CPU)

Chris Conway: Next up we're talking Computershare. One year forward yield of 4.03%, but the share price has taken its lumps both over the last month, down 11%, and 27% over the last 12 months. Any value there, Pete? Buy, hold or sell for you?

Peter Gardner (BUY): It's a buy for us at the moment. The thing about the Computershare business is they do investor services, but they're also very exposed to what interest rates are going to do. So when interest rates are going up, they get a benefit. When interest rates fall, they take a hit. Now they tried to point out in their update that they do have some opposite effects to that. So when interest rates fall, they should get more deals coming through, but it definitely won't offset that. So your view on this company is definitely based on what you think about interest rates going forward. We think in Australia at least, interest rates look like they're going up over the next year, so it's a buy for us.

Chris Conway: Sean, what about you? Buy, hold or sell for Computershare?

Sean Roger (HOLD): Hold for me. The company has done a pretty good job over the last few years managing and terming out that margin income. It's perhaps not as sensitive to rate movements as it once was if we do end up with a rate cutting environment. And I think the core business had a tough couple of years during COVID, but it's starting to pick up on the back of improved capital markets activity. The thing that holds us back is we're starting to see in the US a bit more chatter around tokenisation. I think you've had the New York Stock Exchange announce that they're looking at launching a 24/7 trading market that's got instant settlement and a lot of runway there and things to fall into place for that to happen, but I think if it does, there's just a bit of uncertainty as to how it impacts parts of Computershare’s business. So it's a pretty attractive yield and I think it's relatively sustainable for the next few years, but just with that question mark there, it keeps me on the fence.

The Lottery Corporation (ASX: TLC)

Chris Conway: To close out, ladies and gentlemen, we're going to talk about the Lottery Corporation. Who doesn't love a punt? Especially when the jackpots are pushing $80-100 million. One year forward yield of 3.1% growing to 3.55% and then 3.85% over the years. Sean, buy, hold or sell for you?

Sean Roger (BUY): It's a buy for us. We really like the lottery category and asset class. I think it's shown over time that you do get periods of volatility with jackpots, but it does tend to have pretty solid growth over the longer term. For TLC, it owns a near monopoly in Australia with pretty long data concessions, apart from Victoria. It's got a really nice growth algorithm where you do have mid-single digit top line growth with turnover and a little bit of price, but they've got these really nice structural tailwinds to their margins. When more people buy tickets online, the margins are much higher because they're not paying commissions to the retail agents. So you can get to that high single-digit growth, which we think is sustainable for a long period to come. I do think with the potential for the Victorian licence, which is due to expire soon, it could be an opportunity for the company to increase their target leverage range.

So I think over time there is scope with the earnings growth and potentially for that dividend yield that you mentioned to increase over time. So it's a buy.

Chris Conway: Pete, up 7% over the past year. Lottery Corporation, buy, hold or sell for you?

Peter Gardner (BUY): It's a buy for us as well. If you look at their recent result, they did really well in Keno where they got a good lottery outcome, so some good jackpots there, but in terms of the major part of their business, they actually had quite a tough jackpot period. There were fewer jackpots than there normally is. And so we see that bouncing back next year if luck goes back to their way. And so we see a good increase in profits next year and so on increase in dividends as well.

Chris Conway: There you have it, ladies and gentlemen, a nice double buy there to finish on. Huge thanks to Sean and Pete for these Income Series special episodes of Buy, Hold, Sell. If you enjoyed this episode, make sure to give it a like and don't forget to follow our YouTube channel. We're adding lots of great content every single week.