Top 5 ASX dividend shares to watch in September 2025

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 2x 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 which combines reliable dividend payers with some higher-yield opportunities can help smooth out risk.

Top 5 ASX dividend shares to watch

From Lycopodium’s Group's steady 4.34% to Transmetro’s exceptional 30%, these five stocks offer compelling dividend income backed by strong fundamentals.

Our selection criteria

• Dividend cover ratios above 2x for sustainability
• Diversified across multiple sectors to reduce risk
• Recent financial performance supporting dividend payments
• Market capitalisations from A$26.77 million to A$3.7 billion

Overview of the stocks in this article

All the stocks in this article can be share traded and/or traded via CFDs with IG Australia.

1. Transmetro Incorporation Limited (ASX: TCO)
 

Industry: hospitality and accommodation

Market cap: A$26.77 million¹

Dividend yield: 30%²

Dividend cover: 4.09x

Transmetro has three core divisions within the company – Hotels, Inns and Apartments and Theme Pubs.

Its properties service business and leisure clientele, giving share traders exposure to a broad market.

Transmetro has been listed on the ASX for more than 25 years and is the country’s oldest wholly Australian-owned and managed hotel chain.

Its focus is on continuing to optimise its hospitality portfolio and improve its operational efficiencies across Metro Hotels and Metro Apartments. This is in a bid to progress with the recovering travel and accommodation market post-Covid-19.

Highlights:

• 1H FY25 earnings per share (EPS) was up from A$0.08 to A$0.13 compared to 1H FY24³
• On average, over the past three years, the company’s EPS has increased by 24% annually, as has the share price⁴
• Transmetro managed to reduce expenses and lift its profit margin by 14%⁵

2. Woodside Energy Group Limited (ASX: WDS)
 

Industry: energy

Market cap: A$51.02 billion⁶

Dividend yield: 6.95%⁷

Dividend cover: 3.3x

Woodside Energy has been listed on the ASX since 1971 and is typically considered a solid dividend share.

Through a successful merger with BHP’s oil and gas portfolio, the company created a new global energy company. This led to Woodside Energy becoming one of Australia's biggest energy companies.

From exploration and development through to processing, marketing and hydrocarbon product trading, the company is involved in the entire oil and gas value chain.

It’s developing the Scarborough Energy Project, which is expected to produce as much as 8 million tons per annum of liquefied natural gas.

Highlights:

• Its latest full-year results showed a US$3.6 billion net profit after tax⁸
• Net profit was also higher (115%) year over year (YoY)⁹
• The value of the full-year dividend was US$2.316 million¹⁰

3. New Hope Corporation Limited (ASX: NHC)
 

Industry: mining

Market cap: A$3.70 billion¹¹

Dividend yield: 9.34%¹²

Dividend cover: 6.7x

As one of Australia’s most significant coal mining and energy companies, New Hope primarily focuses on thermal coal production for domestic and export markets.

Its assets of note include the Bengalla Mining Company and New Acland Coal operations, along with interests in Queensland Bulk Handling, providing integrated coal supply chain services.

The company expects to produce around 13 million metric tons of equity saleable thermal coal annually from FY25.

New Hope’s current focus is to ramp up operations at New Acland Stage 3, which represents a substantial expansion of its coal production capacity.

Highlights:

• In its latest earnings report, we can see net profit after tax was A$340.3 million – an increase of 35.2% compared to the previous year¹³
• Group saleable coal production of 5.4 million tons, an increase of 32.9% YoY¹⁴
• 2025 interim dividend declared of A$0.19 per share, or A$160.6 million¹⁵

4. Lycopodium Limited (ASX: LYL)
 

Industry: engineering

Market cap: A$454.49 million¹⁶

Dividend yield: 4.34%¹⁷

Dividend cover: 11.8x

Lycopodium has built a reputation as a leading engineering, procurement and construction management (EPCM) services provider, particularly in the mining and minerals processing industries.

It conducts feasibility studies, detailed engineering design, procurement support, construction management and commissioning services.

In May 2025, the company was awarded the Twin Hills Gold Project EPCM contract, and appointed a new non-executive director to the Board in the same month. This latter suggests planning for future growth and governance enhancement.

Earning the award for the Twin Hills Gold Project shows its continued expansion in the gold sector.

Highlights:

• The latest half-year results indicate A$167.4 million in revenue¹⁸
• Net profit after tax was A$25.2 million in the same period¹⁹
• Full-year guidance is to deliver between A$320 million and A$340 million in revenue²⁰

5. IPH Limited (ASX: IPH)
 

Industry: intellectual property

Market cap: A$1.37 billion²¹

Dividend yield: 7.54%²²

Dividend cover: 2.3x

IPH operates as an intellectual property services company providing patent and trademark attorney services, IP strategy consulting and related legal services.

Through strategic acquisitions, it’s grown into one of the leading intellectual property service providers in the region, offering IP solutions to a range of clients – individual inventors to multinational corporations.

It has multiple subsidiary firms around the world, including in Australia, New Zealand, Singapore, Malaysia, Thailand and other Asia-Pacific markets. Its focus remains on expanding its presence in these latter regions.

The ever-growing importance of intellectual property protection positions IPH well for the foreseeable future.

Highlights:

• The latest full-year results report shows underlying net profit after tax was A$61 million, up 20% from the preceding year²³
• The company implemented a share buy-back programme in December 2024, perhaps indicating that it views its own stock price as undervalued
• Underlying EBITDA was A$100.5 million – up 11%²⁴

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 stock 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
 

1. TradingView, August 2025
2. TradingView, August 2025
3. Simply Wall St, March 2025
4. Simply Wall St, March 2025
5. Simply Wall St, March 2025
6. TradingView, August 2025
7. TradingView, August 2025
8. Woodside Energy earnings report, February 2025
9. Woodside Energy earnings report, February 2025
10. Woodside Energy earnings report, February 2025
11. TradingView, August 2025
12. TradingView, August 2025
13. New Hope earnings report, July 2025
14. New Hope earnings report, July 2025
15. New Hope earnings report, July 2025
16. TradingView, August 2025
17. TradingView, August 2025
18. Lycopodium earnings report, February 2025
19. Lycopodium earnings report, February 2025
20. Lycopodium earnings report, February 2025
21. TradingView, August 2025
22. TradingView, August 2025
23. IPH earnings report, February 2025
24. IPH earnings report, February 2025