Chasing income? These top ASX dividend shares could deliver

Do you have space in your portfolio for ASX dividend shares? The Australian share market offers plenty of options to consider.

Here are two high-quality ASX stocks, Sonic Healthcare Ltd (ASX: SHL) and Cedar Woods Properties Ltd (ASX: CWP), that lead their respective sectors and could strengthen your income strategy.

Sonic Healthcare Ltd (ASX: SHL)

This isn’t the flashy ASX growth darling grabbing headlines. Sonic Healthcare is the steady compounder. The ASX dividend share that just keeps turning the crank.

It’s defensive by design. Recession or boom, patients still need blood tests, biopsies and scans. Diagnostic demand is essential, recurring, and far less exposed to consumer sentiment than most industries.

Sonic’s pathology and imaging network spans Australia, Europe, the US and the UK. That global footprint gives it multiple earnings engines and built-in diversification if one region slows. Few ASX healthcare names match that spread.

The structural tailwinds are clear. Ageing populations and the shift toward preventative medicine mean more testing over time, not less. Rising volumes drive reliable cash flow, while disciplined bolt-on acquisitions have expanded scale without wrecking margins.

And then there’s the income stream.

With a market cap around $10 billion, Sonic pays dividends twice a year and has built a long track record of maintaining – and gradually growing – payouts.

Bell Potter forecasts partially franked dividends of 109 cents per share in FY26 and 111 cents in FY27. At a recent share price of $23.14, that equates to yields of roughly 4.7% and 4.8%.

Brokers see upside, too. The consensus 12-month price target sits near $25.59, implying 10.6% potential gains. Bell Potter is more bullish, with a buy rating and a $28.50 target — suggesting upside closer to 23%.

Cedar Woods Properties Ltd (ASX: CWP)

Cedar Woods is a focused residential developer with one big advantage: control. The ASX dividend share owns a sizeable land bank across key growth corridors, giving it the flexibility to release stock when market conditions suit.

That discipline has helped it generate steady cash flow, fund dividends, and avoid the excessive leverage that trips up many property peers.

The strength here is simplicity. The ASX real estate stock sticks to what it knows: master-planned communities and well-located residential projects. And it executes with a conservative balance sheet. In a housing market undersupplied for years, that’s a powerful position.

But let’s be clear: this is still a cyclical business. Earnings can be lumpy, settlements can shift between periods, and higher interest rates or softer buyer sentiment can quickly slow sales. Construction costs also remain a risk if margins tighten.

The outlook? Australia’s housing shortage hasn’t disappeared. Population growth and limited supply should support medium-term demand. If buyer confidence improves and rates stabilise,

Cedar Woods is well placed to convert its pipeline into rising earnings and dividends. The ASX dividend share just declared a fully franked interim dividend of 14 cents per share, up 40% on last year’s interim dividend of 10 cents per share.

Bell Potter believes the ASX dividend share is well-positioned to benefit from Australia’s chronic housing shortage.

The broker expects this to support dividends per share of 35 cents in FY 2026 and then 39 cents in FY 2027. Based on its current share price of $8.60, this equates to 4.1% and 4.5% dividend yields.

The post Chasing income? These top ASX dividend shares could deliver appeared first on The Motley Fool Australia.

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• This ASX All Ords stock is rocketing after posting 163% profit growth
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• Morgans says these buy-rated ASX dividend stocks offer yields up to 10%
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Motley Fool contributor Marc Van Dinther 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 recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.