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Top 6 ASX dividend shares to watch in August 2025
High dividend yields can be tempting, but many are unsustainable yield traps. These six ASX stocks offer yields from 4.69% to 16.31% with solid dividend cover ratios above 2x, helping you find genuine income opportunities while avoiding the pitfalls.
Important to know
This article is for informational purposes only and does not constitute investment or trading advice. Please ensure you understand the risks and consider your individual circumstances before trading.
Key takeaways
- High dividend yields aren't always sustainable - focus on dividend cover ratios above 2x to avoid yield traps
- Strong dividend cover ratios above 2x normally provide a crucial safety buffer, ensuring these companies can maintain payments even during earnings downturns
- Diversification across sectors (automotive, steel, insurance, tourism) helps reduce concentration risk
What makes a sustainable dividend share?
While high yields can be tempting, the key to successful dividend investing lies in sustainability rather than headline-grabbing percentages.
Dividend cover ratio: your sustainability indicator
The dividend cover ratio indicates how many times a company can pay its dividend using current earnings. A ratio above 2x means the company earns twice what it pays out, providing a safety buffer if profits decline temporarily.
Why we focus on 2x+ cover ratios
Companies with lower cover ratios risk cutting dividends during tough periods. The six stocks in this analysis all maintain cover ratios above 2x, helping you avoid the "dividend trap" where high yields mask deteriorating business fundamentals.
Beyond the numbers
Strong dividend shares also demonstrate consistent profit generation, manageable debt levels and a track record of maintaining payments through economic cycles. These factors are more important than the current yield when building a sustainable income portfolio.
How to avoid dividend investing pitfalls
Spotting yield traps before they bite
High yields often signal trouble rather than opportunity. A yield trap occurs when a company's share price falls due to business problems, making the dividend appear artificially high.
Warning signs include declining profits, rising debt levels and dividend cover ratios below 2x. Companies paying out more than they earn cannot sustain these payments long-term.
Red flags to watch:
- Dividend yield significantly above sector average
- Falling revenue over multiple quarters
- Debt-to-equity ratios increasing rapidly
- Management cutting guidance or investment
Building a balanced income portfolio
Successful dividend investing involves diversification across sectors and company sizes. The six stocks in this analysis span automotive retail, manufacturing, tourism, insurance and steel production, reducing sector concentration risk.
Consider combining higher-yielding stocks, such as Helia's 16.31% with steadier performers, like Autosports' 4.69%, to balance income potential with stability. This approach helps weather economic cycles that affect different industries at different times.
Top 6 ASX dividend shares to watch
From Autosports Group's steady 4.69% to Helia's exceptional 16.31%, these six 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$169 million to A$1.4 billion
The range spans six sectors: Automotive retail, steel manufacturing, tourism, insurance and motorcycle retail. This diversification helps protect against sector-specific downturns while maintaining attractive income potential.
Each company analysis includes current yield, dividend cover ratio, recent performance highlights and key risks to watch. Sustainable dividend investing prioritises consistency over headline yields.
Remember, past performance is not an indicator of future returns.
Overview of the stocks in this article
All the shares in this article can be share traded and/or traded via CFDs with IG Australia.
Company |
Market cap |
Dividend yield |
Dividend cover |
Trade the share CFD with us? |
Share trade the stock with us? |
A$495.97 million |
4.69% |
5.14 |
✓ |
✓ |
|
A$194.01 million |
8.02% |
4.25 |
✓ |
✓ |
|
A$169.32 million |
5.39% |
3.03 |
✓ |
✓ |
|
A$228.80 million |
4.84% |
2.88 |
✓ |
✓ |
|
A$526.99 million |
8.63% |
2.53 |
✓ |
✓ |
|
A$1.40 billion |
16.31% |
2.25 |
✓ |
✓ |
1. Autosports Group Limited (ASX: ASG)
Industry: retail automotive
Market cap: A$495.97 million1
Dividend yield: 4.69%2
Dividend cover: 5.14
Autosports Group is a premium car dealership, representing brands like Audi, BMW and Lamborghini across Australia.
Its core business is in the new and used vehicle sales sector, along with aftermarket products, spare parts, finance and insurance products, and accident repair services.
The company recently announced an agreement to acquire Gulson Canberra, including Porsche Centre Canberra. Gulson Canberra operates Porsche, Fiat, Alfa Romeo, Leapmotor, Abarth and Jeep in the area.
Paying a dividend yield of 4.69% and backed by a 5.14x cover ratio, Autosports offers income share traders exposure to discretionary consumer spending without the volatility seen in other retail names. Its premium focus and brand partnerships have helped it carve out a resilient niche in a competitive sector.
Highlights:
- Its latest half-year earnings statement indicates that revenue grew 2.1% in a challenging new-vehicle market3
- It recently completed the acquisition of Stilwell Motor Group (SMG) – responsible for BMW, MINI, Volvo Cars and more4
- The full-year cycling of the acquisition of SMG and Greenfields will support revenue in H2 20255
2. Bisalloy Steel Group Limited (ASX: BIS)
Industry: steel manufacturing
Market cap: A$194.01 million6
Dividend yield: 8.02%7
Dividend cover: 4.25
Bisalloy Steel is Australia’s only manufacturer of quenched and tempered steel, supplying defence, mining and construction sectors.
The company operates in two separate geographic segments – Australia and overseas, with the majority of its revenue derived from its Australian arm.
The company continues to benefit from elevated infrastructure demand and a growing reputation for specialised steel products. Its consistent order book and international expansion are helping drive earnings stability.
With a dividend yield of 8.02% and a cover ratio of 4.25x, Bisalloy offers industrial income with a global flavour.
Share traders looking for a smaller-cap stock with real-world demand and strong balance sheet credentials may find this an underrated dividend performer.
Highlights:
- Net income of A$15.74 million in the latest quarterly report8
- The share price has grown from A$2.85 on 7 April 2025 to A$4.06 as of 24 July 2025
3. Reef Casino Trust (ASX: RCT)
Industry: real estate rental, development and operations
Market cap: A$169.32 million9
Dividend yield: 5.39%10
Dividend cover: 3.03
Reef Casino Trust owns the Reef Hotel Casino in Cairns, offering share traders exposure to tourism and hospitality-linked earnings. It makes its money through casino operations (like electronic gaming and table games) and hotel services (such as accommodation, food and beverage).
The Trust regularly pays out dividends – typically half-yearly.
As the company is tied to the tourism and gaming industries, much of its performance has rested on a post-Covid-19 recovery, which it has weathered well enough to satisfy share traders.
Its share price on 28 April 2025 was A$2.89, swelling to A$3.44 as of 24 July 2025.
Highlights:
- The Trust will continue to take a low-risk approach to its business in 202511
- The company has performed well considering that post-Covid-19 business is still not back to the same levels as before the pandemic12
- The passing of the Casino Control and Other Legislation Amendment Act 2024 by the Queensland Parliament last year will lead to new gaming product acquisitions for the Trust13
4. MotorCycle Holdings Limited (ASX: MTO)
Industry: retail automotive
Market cap: A$228.80 million14
Dividend yield: 4.84%15
Dividend cover: 2.88
MotorCycle is Australia’s largest motorbike dealership, with its core business being the sale of new and used bikes, accessories and parts, finance, insurance, mechanical protection plans and servicing.
Its acquisition of Mojo Motorcycles in 2022 has continued to boost margins and expand its product offering.
Looking to the future, the company continues to develop its dealer network and strengthen relationships with major bike manufacturers. It’s also investing in digital capabilities and exploring opportunities in the electric motorcycle industry through its Mojo Electric Vehicles subsidiary.
In its latest interim annual report, MTO posted a 12% increase in revenue from ordinary activities compared to the six months ended 31 December 2023.16
Highlights:
- Basic earnings per share (EPS) increased 44% per ordinary share according to the latest interim annual report17
- New vehicle retail unit sales increased 7% and used vehicle sales increased 10%18
- Retail parts and accessories revenue increased by 7%19
5. Tower Limited (ASX: TWR)
Industry: insurance
Market cap: A$526.99 million20
Dividend yield: 8.63%21
Dividend cover: 2.53
Tower is a New Zealand-based general insurer, providing cover across home, motor and contents.
The company has recently seen premium growth driven by pricing increases and new digital initiatives aimed at reducing claims processing costs.
Tower continues to push to gain market share in the general insurance space in New Zealand, as well as exploring growth opportunities in the Pacific Islands.
Offering a dividend yield of 8.63% with a cover of 2.53x, Tower is standing out as a reliable payer in the insurance space.
Share traders looking for a high-yield pick with improving fundamentals might find Tower’s combination of digital agility and cost control an appealing mix.
Highlights:
- In the latest half-year report, Tower states that claims ratios were reduced and below historical levels22
- Customers grew from 309,000 at HY24 to 312,00023
- Reported profit of NZ$49.7 million24
6. Helia Group Limited (formerly known as Genworth Mortgage Insurance Australia Ltd) (ASX: HLI)
Industry: Insurance
Market cap: A$1.40 billion25
Dividend yield: 16.31%26
Dividend cover: 2.25
Helia, formerly known as Genworth, specialises in lenders' mortgage insurance (LMI) for Australian financial institutions. This is cover for lenders if homeowners default on their loans.
The insurer has benefited from stabilising property prices and steady loan origination volumes, which have helped support premium income.
In May, Helia announced an on-market share buyback of up to 10% over the next 12 months, signalling strong capital confidence and a commitment to returning value to shareholders.
With a dividend yield of 16.31% and a cover ratio of 2.25, Helia is an attractive option for those seeking yield exposure in the financial sector. The company’s prudently managed balance sheet and ongoing push to diversify into risk analytics services further solidify its long-term prospects.
Highlights:
- In its latest full-year results report, the company indicated a statutory net profit after tax (NPAT) of A$231.5 million27
- In April 2025, it paid a special dividend of A$0.53 per share in addition to the ordinary dividend28
How to trade ASX dividend shares with IG AU
CFDs
- Open a CFD trading account with IG AU
- Search for ASX dividend shares on the IG platform
- Decide whether to go long (buy) or short (sell)
- Choose your position size
- Set stop-loss and limit orders
- Place your trade and monitor it
Share trading
- Open a share trading account with IG AU
- Search for ASX dividend shares available for direct ownership
- Choose the stock you want to buy
- Determine how many shares you want to purchase
- Place your order
- Monitor your investment and collect any dividends
FAQs about dividend shares
What are the best high-yield ASX dividend stocks for 2025?
The highest-yielding ASX dividend shares aren't always the best long-term income investments. Our analysis focuses on sustainable dividend stocks with cover ratios above 2x, ranging from 4.69% to 16.31% yield. Strong dividend cover ratios help protect against dividend cuts during market downturns, though past performance doesn't guarantee future returns.
How do franking credits boost Australian dividend stock returns?
Australian dividend shares often come with franking credits that can significantly enhance returns for local investors. These tax credits can effectively increase your dividend yield by 30-40%, making ASX dividend stocks particularly attractive compared to international alternatives. The exact benefit depends on your tax situation and should be considered as part of your overall investment strategy.
Should I invest in ASX dividend shares or growth stocks?
Both ASX dividend shares and growth stocks have roles in a balanced portfolio. Dividend-paying stocks provide regular income and can offer more stability during volatile markets, while growth stocks may deliver higher capital appreciation. Many successful income investors combine both approaches, using dividend shares for steady cash flow while maintaining some growth exposure for long-term wealth building.
When do ASX dividend stocks go ex-dividend?
Ex-dividend dates vary by company, but most ASX dividend shares pay dividends twice a year. You must own shares before the ex-dividend date to receive the upcoming payment. Our monthly updates include current dividend schedules for featured stocks, though these dates can change. Always verify ex-dividend dates directly with company announcements before making investment decisions.
Footnotes
- TradingView, July 2025
- TradingView, July 2025
- Autosports, July 2025
- Autosports, July 2025
- Autosports, July 2025
- TradingView, July 2025
- TradingView, July 2025
- TradingView, July 2025
- TradingView, July 2025
- TradingView, July 2025
- Reef Casino Trust annual report, March 2025
- Reef Casino Trust annual report, March 2025
- Reef Casino Trust annual report, March 2025
- TradingView, July 2025
- TradingView, July 2025
- MotorCycle Holdings Limited, December 2024
- MotorCycle Holdings Limited, December 2024
- MotorCycle Holdings Limited, December 2024
- MotorCycle Holdings Limited, December 2024
- TradingView, July 2025
- TradingView, July 2025
- Tower half-year results, May 2025
- Tower half-year results, May 2025
- Tower half-year results, May 2025
- TradingView, July 2025
- TradingView, July 2025
- Helia annual report, February 2025
- Helia annual report, February 2025
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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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