My top high-yield ASX dividend stock to buy in 2023

a young woman smiles widely as she holds up the keys while sitting in the driver's seat of her new car.a young woman smiles widely as she holds up the keys while sitting in the driver's seat of her new car.

The downfall of ASX growth shares over the past 18 months has meant many investors have flocked to the safety of dividend stocks.

However, a high yield does not necessarily make a great investment.

This is because a stock might offer outstanding dividend yields because its valuation has fallen. And a point-in-time yield percentage does not say anything about the future prospects of the business.

So in order to pick an income-producing stock that also has sound business fundamentals, the yield might need to come down a tad from the highest on offer.

8% dividend with excellent growth? Yes, please

SG Fleet Group Ltd (ASX: SGF) is not a name often spoken about, but the company currently offers a chunky dividend yield of 8.15%.

The Sydney company, with a market capitalisation of around $660 million, provides fleet management services.

With a resurgence in private transport since the emergence of COVID-19, the company has posted an impressive performance in recent times.

In fact, during February’s reporting season, SG Fleet shares rocketed 10% in just a couple of hours after posting a 41% leap in half-year profit.

“We have demonstrated the strength of our competitive position and our ability to turn the steady stream of new business opportunities into further customer wins and vehicle orders,” the company announced at the time.

Add to that a 100% franked dividend stream, and you have yourself a handsome income stock in your portfolio.

Another bonus is that currently, the share price is trading about 23% lower than it was a year ago, presenting a tempting buying opportunity.

On CMC Markets, all four analysts covering the fleet manager rate the stock as a buy.

Rules are changing for more efficient vehicles 

Earlier this month, finance expert and accountant John-Louis Judges named SG Fleet as a stock that’s set to benefit from a changing Australian economy.

“Recent changes to the fringe benefits tax for electric and low-emission vehicles in Australia have made it more attractive to lease rather than buy these vehicles, benefiting SGF’s business model,” Judges said in The Bull.

“There is an expected increase in demand for SGF’s services following [a] global… shift towards environmentally friendly vehicles.”

He noted how the company operates in Australia, New Zealand, and the United Kingdom.

“SGF’s global spread indicates a diversified revenue stream, and allows them to weather any economic downturns or market volatility,” he said.

“SGF’s ability to adapt to changing market conditions and strong financial performance make it a sound investment choice for investors who may be looking for long-term growth.”

The post My top high-yield ASX dividend stock to buy in 2023 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sg Fleet Group Limited right now?

Before you consider Sg Fleet Group Limited, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sg Fleet Group Limited wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of April 3 2023

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];[property] = defaultValue;

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s