Top 5 ASX dividend shares to watch in April 2026

How ASX dividend shares work (and what to look for)

ASX dividend stocks are shares in Australian companies that pay part of their profits back to shareholders as cash or additional shares. For many traders, they’re a way to earn regular income without selling their investments.

When you’re picking dividend stocks, there are three key things to check:

• Dividend yield – This is the annual dividend amount divided by the share price. For example, if a $10 stock pays $0.50 in dividends each year, its yield is 5%. Higher yields can look tempting, but they’re not always better
• Dividend cover ratio – This shows how many times a company’s profit can pay for its dividend. A cover ratio of around 1.5x or higher is generally seen as sustainable.  Anything much lower means the company might be stretching to afford its payouts
• Company health – Even if the yield and cover ratio look good, check that the business has steady earnings, manageable debt and a track record of paying dividends consistently

If you keep these three points in mind, you can filter out weaker candidates before you invest.

Avoiding dividend traps

A ‘dividend trap’ happens when a stock’s yield looks unusually high because the share price has dropped, often due to problems in the business. New investors sometimes buy in for the income, only to see the dividend cut and the share price fall further.

To reduce the risk of falling into a trap:

• Check the trend in profits – If earnings are falling year after year, the dividend may be at risk
• Watch the debt levels – Companies with high debt may struggle to keep paying dividends during tough times
• Look at payout history – A long history of stable or growing dividends is a good sign; frequent cuts are a warning flag

In short: a high yield on paper doesn’t mean it’s a safe income stream. A balanced approach that combines reliable dividend payers with some higher-yield opportunities can help smooth out risk.

Top 5 ASX dividend shares to watch in April 2026

From Karoon Energy’s 3.38% dividend yield to Viva Energy’s respectable 2.73%, these five shares offer dividend income, backed by solid fundamentals.

Our selection criteria

• Dividend cover ratios above 1.5x for sustainability
• This month’s list is all about energy, one of Australia’s strongest sectors, including non-energy minerals, aluminium, coal, oil and gas production and oil refining
• Recent financial performance supporting dividend payments – including growing share price values over the past six months in all cases, albeit some quite moderately
• Market capitalisations from A$1.44 billion to A$22.43 billion

Overview of the shares in this article

Each of the stocks in this article can be share traded and CFD traded with IG Australia.

All figures are accurate as of 30 March 2026.

1. South32 Limited (ASX: S32)
 

Industry: Non-energy minerals

Market cap: A$18.03 billion¹

Dividend yield: 2.34%²

Dividend cover ratio: ~1.82x

South32 is a globally diversified mining and metals company that was originally spun out from BHP. Its business model is centred on producing commodities that are essential for the global energy transition and modern infrastructure.

The company operates a diverse portfolio that includes alumina and aluminium in Australia, Brazil and Southern Africa, as well as copper in Chile and silver, lead and zinc at its Cannington mine in Queensland.

By focusing on base metals, South32 aims to distance itself from traditional fossil fuels and align its revenue streams with the rising demand for low-carbon technologies.

Over the past six months, South32 has reported a significant strengthening in its financial position. Recent updates highlight a marked increase in earnings underpinned by higher prices for base and precious metals.

A major strategic milestone was the completion of the sale of its Cerro Matoso nickel operation, which further simplified the company’s structure. However, the business also announced that its Mozal Aluminium smelter would move into a maintenance phase due to challenges with securing affordable electricity.

Highlights:

• On the development front, construction continues at the large-scale Hermosa project in the US, which is expected to be a major source of zinc and silver for decades
• For share traders, South32 offers a combination of disciplined capital management and exposure to the future-facing metals market
• Over the past six months, the company’s share price has increased by 60.36%³

2. Alcoa Incorporation (ASX: AAI)
 

Industry: Aluminium

Market cap: A$22.43 billion¹

Dividend yield: 0.70%⁵

Dividend cover ratio: ~14.15x

Alcoa is one of the world's most recognisable names in the aluminium industry, operating across the entire value chain from bauxite mining to the production of finished aluminium metal.

The company’s business model is built on high-volume production and strategic geographic placement of its refineries and smelters.

It provides the raw materials used in everything from aerospace and automotive manufacturing to sustainable packaging and construction.

Alcoa is particularly noted for its focus on innovation, including the development of new technologies aimed at carbon-free smelting.

Alcoa successfully completed the sale of its interest in a major joint venture in Saudi Arabia, a move that provided a substantial boost to its cash reserves.

More broadly, the company has benefited from a steady rise in global aluminium prices over the last half-year, which has translated into improved profitability and a strengthened balance sheet.

Highlights:

• The company’s aggressive debt reduction and recent production records at several smelters suggest a lean, efficient operation
• While the aluminium market can be cyclical, Alcoa’s significant cash position and commitment to shareholder dividends provide a level of stability
• Its share price has risen by 86.62% over the past six months⁶

3. Whitehaven Coal Limited (ASX: WHC)
 

Industry: Coal

Market cap: A$7.56 billion⁷

Dividend yield: 1.08%⁸

Dividend cover ratio: ~2.50x

Whitehaven Coal is Australia’s leading independent producer of high-quality coal, primarily operating in the Gunnedah Basin of New South Wales and the Bowen Basin in Queensland.

Its business model has evolved significantly following the major acquisition of the Daunia and Blackwater mines, shifting its focus from purely thermal coal used for power generation toward metallurgical coal, which is a critical ingredient in steel production. This diversification enables the company to tap into different market dynamics and reduces its reliance on a single commodity type.

The last six months have been a transformative period for Whitehaven. The company has successfully integrated its large-scale Queensland acquisitions, leading to a substantial increase in overall coal production.

While international coal prices have moderated compared to previous highs, the company’s ability to manage costs has allowed it to remain profitable and continue generating solid cash flows.

Highlights:

• Recent updates also confirmed the successful sale of a minority stake in the Blackwater mine to joint venture partners, further strengthening the company's financial flexibility
• Share traders may find Whitehaven an interesting prospect due to its status as a cash cow during periods of energy demand. The company is known for its high payout ratios, often returning a significant portion of its earnings to shareholders through dividends
• Its share price has increased by 50.69% over the past six months⁹

4. Karoon Energy Limited (ASX: KAR)
 

Industry: Oil and gas production

Market cap: A$1.44 billion¹⁰

Dividend yield: 3.38%¹¹

Dividend cover ratio: ~3.87x

Karoon Energy is an independent oil and gas producer with a primary focus on offshore assets in Brazil and the Gulf of Mexico.

Its business model involves acquiring and managing mid-life oil fields – assets that are already in production but can be optimised through technical expertise and focused investment. By taking full operational control of these fields, such as the Baúna project in Brazil, Karoon aims to extend their productive life and maximise the cash they generate.

In the past six months, Karoon has focused heavily on operational reliability and facility maintenance. The company has navigated a period of softer oil prices by improving its cost structures and maintaining healthy profit margins.

Karoon has seen a significant upgrade in its estimated oil resources in Brazil, particularly within the Neon discovery, suggesting potential for growth well into the next decade.

Highlights:

• Karoon might be suitable for share traders looking for a high-margin energy play with clear growth catalysts
• Over the past six months, its share price has risen by 29.70%¹²

5. Viva Energy Group Limited (ASX: VEA)
 

Industry: Oil refining/marketing

Market cap: A$4.03 billion¹³

Dividend yield: 2.73%¹⁴

Dividend cover ratio: ~3.00x

Viva Energy is a major Australian energy company that supplies roughly a quarter of the country’s liquid fuel requirements.

Its business model is built around a diversified downstream operation, including the Geelong Refinery, a national network of import terminals, and a vast retail footprint operating under the Shell, Liberty and OTR brands. By controlling the journey from the refinery or terminal to the service station pump, Viva captures value at multiple stages of the fuel supply chain.

The past six months have seen Viva Energy make significant strides in its transition toward becoming a more convenience-led retailer. The integration of the OTR (On The Run) network has progressed well, with dozens of new stores planned to open through 2026.

While refining margins have been somewhat volatile recently, the company’s commercial and industrial segments have performed strongly, particularly in the aviation and transport sectors. A major maintenance programme at the Geelong Refinery was also completed on schedule, ensuring the facility is prepared for new Australian fuel standards.

Highlights:

• For share traders, Viva Energy offers a relatively defensive profile with a growing retail growth story. The company provides a reliable essential service, which tends to keep earnings steady even when the broader economy slows down
• Its commitment to a high dividend cover ratio and the ongoing expansion of its high-margin convenience store network make it an attractive option for those seeking a blend of consistent income and strategic business growth
• Its share price has increased by 40.17% over the past six months¹⁵

How to trade ASX dividend shares with IG AU

CFDs

1. Open a CFD trading account with IG AU
2. Search for ASX dividend shares on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Share trading

1. Open a share trading account with IG AU
2. Search for ASX dividend shares
3. Choose the shares you want to buy
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about dividend shares 

Footnotes

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