Buy Hold Sell: 6 stocks with above-market yields (and 2 from the managers)

With the headline yield for the ASX 200 now sub 4%, generating a decent yield from equities has become more challenging in recent years. There are a couple of factors investors can screen for, however, to make the task a little easier.

First and foremost, make sure to look for companies with an above-market yield – otherwise, you might as well just buy the market. In this case, the line in the sand is 4%.

Secondly, look for companies whose consensus estimates suggest they will at least maintain, if not grow, their dividends over the next two years. As we all know, there is no point getting 8% one year, and then no dividend the following year – income investors crave consistency.

So, with those simple but powerful guardrails in place, Livewire’s James Marlay is joined by Peter Gardner from Plato Investment Management and Hugh Dive from Atlas Funds Management to run the ruler over a handful of stocks that meet the criteria.

For good measure, they each share a name that they like for its above-market yield and expected consistency in the years to come. 

Please note this episode was filmed on 16 July 2025.

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Edited Transcript

James Marlay: Hello and welcome to Buy Hold Sell. Today we're talking about dividend stocks, those that can give you better yield in the market. Maybe a little bit of a surprise in the future as well. To help me talk about these dividend darlings, I've got Pete Gardner from Plato Investment Management and Hugh Dive from Atlas Funds Management. Gents, thanks very much for coming in.

Peter Gardner: Thanks for having us.

GQG Partners (ASX: GQG)

James Marlay: Now we're going to go over a couple of stocks in a quick Buy Hold Sell episode. To let you know how we came up with this eclectic list of names, we scanned the market for stocks with yields better than 4% so ahead of the market, which is 3.5%, maybe a little lower at the moment, but we also wanted to see that they were going to be maintaining or even growing those dividends over the next two years. As I mentioned, it's an eclectic mix. Let's see what our experts think. Pete, I'm going to start with you. Fund manager, GQG Partners, buy, hold or sell?

Peter Gardner (HOLD): It's a hold for us. It's on a P/E of nine, so it's incredibly cheap. It has been growing recently and fund inflows have been strong. The challenge for us is that more recent performance has been challenged, so they've been underperforming the market. They had a bet that the market would go down in this recent period, and obviously, we know the market's been continuing to rally. And so we think flows, follows performance, and so with that poor performance, eventually you'll see that flow through into their flows data and so that's what keeps us back from owning this one.

James Marlay: It has had a great couple of years, hoovering up a lot of firms. Buy, hold, or sell on GQG?

Hugh Dive (SELL): I think they can maintain their dividend, but I'm really wary of owning fund managers. Magellan used to pay a dividend of $2.15 a share. Lastly, they paid 50 cents. Fund managers can fall out of favour, similar to what Peter says, and money can come in and out. So as a consistent dividend payer, fund managers probably aren't. I think Magellan paid 50 cents last year. I don't think they're going to pay that this year.

Liberty Financial Group (ASX: LFG)

James Marlay: Let's go to Liberty Financial Group - commercial loans. Buy, hold or sell?

Hugh Dive (SELL): Very variable dividend yield. My question is with the shareholder who owns 75%. I generally wouldn't like to own a company where one shareholder owns such a big part of the register because often they can have very different dividend or investment horizons and thesis for individual investors. I think that dividend's going to be under a bit of pressure. They're in a much more competitive environment for loans. They've cut the dividend before in the past two years. I think it's a sell.

James Marlay: Okay. Pete, buy, hold or sell on Liberty?

Peter Gardner (SELL): It's a sell for us as well. I agree with what Hugh said. The other thing that's worth noting is that with the extra competition, the banking margin, when you look at their net interest margins, they've been dropping significantly over the last few years. So, we think going forward we'd want to see that stabilise and some positive momentum in that before we look at Liberty.

HomeCo Daily Needs REIT (ASX: HDN)

James Marlay: Okay. Next one. HomeCo, code's HDN. Buy, hold or sell?

Peter Gardner (HOLD): For us, it's a hold. It's a very stable business. It's got long-term tenants with pretty stable companies like Coles and Woollies, but it's not cheap enough given how much growth it's on. So for us, it's fairly valued. It's got a dividend yield around 7% but not enough to get us in.

James Marlay: Gee, 7%. Can't get you in for 7%. I'd love to know what you do like.

Peter Gardner: With no growth on that.

James Marlay: Hugh, same question for you.

Hugh Dive (SELL): I reckon it's a sell. Similarly, it lives above its means. So when you look at LPTs, we look at a metric called adjusted funds from operations, which looks at your free float cash minus your maintenance CapEx and your incentives. Home pays about far greater than their AFFO, about 110%. That's a sign that they're going to have to cut it at some stage because them as landlords, they have to maintain the quality of their assets in order to keep tenants and they have to pay incentives to keep tenants. We saw prior to the GFC, a lot of Aussie LPTs lived above their means paying these great yields. They did really well, but eventually that has to be cut. They're not reserving enough cash to maintain the quality of their assets.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

James Marlay: Next up is Dalrymple Bay Infrastructure. Before you give me your buy, hold or sell, can you give our viewers a bit of an explain on what it does?

Hugh Dive (BUY): It's a very interesting company in that they own a port up in Queensland that loads coal on it, but they don't actually have operate it. They're just the owner of the assets. It's a lightly regulated utility. They have take or pay contracts generally quite long-term, moving generally met coal out of the Bowen Basin off to the world and they don't have to operate it, so they don't have the stevedores, they don't have any union problems. That's all dealt by the owners of the asset. It's quite an attractive long-dated asset. 

James Marlay: Okay. And is it a buy, hold or a sell at current prices?

Hugh Dive: We're buy at the current prices. Recently, Brookfield sold down, so unlike the first two in the list, GQG and Liberty, there's no chance of them coming into the ASX 200, there's a reasonable chance of Dalrymple Bay coming into the 200. Brookfield sold down 23%. So the free floats looking a little bit better. They'll face a bit of a higher interest cost in the next couple of years, but that's going to be offset by higher charges on the infrastructure. So I think, it's a very interesting looking company.

James Marlay: Okay. Peter, buy, hold or sell on Dalrymple Bay?

Peter Gardner (SELL): It's a sell or buy for us. We actually picked this one a couple of years ago and we're pretty happy because it's gone from $2 to $4 50 during that time. We think during two years ago, the market was definitely expecting those coal assets to go down over time. Obviously that was when we were peak period for climate change. Now at the moment, given  we still haven't found another way of creating steel other than met coal, we think that structural asset will continue going for  potentially longer than the market expected. So it's now rallied to  take that into account, but it's still sitting on a pretty good yield, as Hugh said, with take off pay contracts that are scheduled to increase. So its dividend should be able to grow from here over the medium term. So we still like it.

NRW Holdings Limited (ASX: NWH)

James Marlay: Okay. Next up, NRW Holdings, buy, hold or a sell?

Peter Gardner (BUY): It's a buy for us as well. It's a mining service company, which is obviously variable. It's one of those more cyclical companies that you've got to be wary of. But a lot of its customers are large customers that are doing more investment. It's got a pretty good order book at the moment, so we think its earnings are pretty solid for the next few years. Obviously these companies, there's always a risk that something could blow up and they could mismanage your contract, but we think it's priced for that. It's on a pretty low P/E of around 12 I think it is with a yield of around in 7%. We like it.

James Marlay: Okay. Hugh?

Peter Gardner (SELL): On the reverse, sell. Mining services and contracting companies are not the place to look for consistent dividend yields. Unfortunately, I've owned other companies like that in the past and generally you've been surprised very heavily on the downside where something just comes out of left field and have to get new contracts every couple of years. It's just a little bit too volatile for my taste. Also they've got that $113 million dollar liability to OneSteel, which they're attempting to recover, which could create a bit more conservative on the dividend payout going forward.

Origin Energy (ASX: ORG)

James Marlay: Okay. Hugh, last stock on my list, Origin Energy, big, pretty stable. Buy, hold or a sell?

Hugh Dive (BUY): They're invested in Octopus Energy. They made a small investment about four years ago in this US and UK-based Octopus Energy, I think, for 230 million pounds. Now they've made a little bit more, they own about 23%, all in a bit over 500 million pounds. There, part of that, it's about to be looking to be IPO'd with Origin's stake worth about 2.3 billion pounds. It doesn't earn any money, though. Looking through it, though, because Octopus doesn't make any money, it doesn't really impact Origin's dividend. Two things there. I think they'll be able to maintain their dividend. APLNG, some of the new pricing with the Chinese is coming off, but they're getting higher energy prices, particularly in New South Wales, and that'll maintain the dividend. It's a buy.

James Marlay: Origin Energy, Pete, buy, hold or sell?

Peter Gardner (BUY): It's a buy for us as well. So they have struggled a little bit over the last year as oil and gas prices have gone down. 

Hugh Dive: The share prices just straight up.

Peter Gardner: I know, but the earnings over that from APLNG has been dropping, but it's been benefiting from that Octopus investment, as Hugh mentioned. The other thing worth noting with them is that AussieSuper obviously avoided the takeover a couple of years ago, which I think was good for the Aussie market because Origin, I think, is going to end up being worth a lot more than that takeover price.

James Marlay: A few ideas from the scan we ran, but we're not flush. Let's finish it off with a couple of your top dividend picks. What have you got for us, Pete?

Qantas (ASX: QAN)

Peter Gardner: So our dividend pick is potentially one that people wouldn't expect. It's another cyclical company, so Hugh's unlikely to like it scared, but Qantas is our pick for this one. Qantas is currently doing incredibly well in the market environment. Obviously, travel since COVID, it has been booming. They're in a cosy duopoly in the Aussie market where most of their earnings come from the domestic business and their frequent flyer business. Even though there are lots of Qantas haters out there, and I've had my own share of arguments with the Qantas staff, we still keep booking with them, and so we think Qantas are still relatively cheap at a P/E of around 10 with the ability to grow as well.

James Marlay: I grimace every time I check out the flights, almost double what I used to pay a few years ago, but I don't have a choice where I come from. So someone's getting the money. Hugh, what's your top dividend pick?

Amcor (ASX: AMC)

Hugh Dive: Probably more boring than Pete's here. Amcor is the world's largest packaging company.

James Marlay: That is boring.

Hugh Dive: Very boring but there's no alternatives. You can't get your medicine in a brown paper bag. They're benefiting from a range of acquisitions. They've recently completed the acquisition of Berry, which further increases their size. That's going to be quite substantial. Earnings per share accretion around about 10% a year for the next couple of years. Trades on a 5% yield, paid in US dollars, paid quarterly, benefiting from the size being a payout ratio of 60%. That's something we look at quite closely. We like it. There's no alternative packaging, particularly in medicine and food and a lot of flexibles. I think it's a very good quality, consistent dividend paying pick.

James Marlay: Well, for those of you out there looking for income, sometimes boring is beautiful. I hope you enjoyed that episode of Buy Hold Sell, which is part of our income series taking place on Livewire right now. Go check it out.