Dividend investors on the ASX have plenty of choice. The market is full of companies that return a meaningful portion of their profits to shareholders.
When I look for ASX dividend stocks, I tend to focus on businesses that combine reliable income with solid underlying operations. A dividend is great, but it is even better when it is supported by a strong business model and the potential for earnings to grow over time.
With that in mind, here are three dividend-focused ASX stocks I would be looking at this month.
Commonwealth Bank of Australia (ASX: CBA)
I think it is impossible to talk about dividend investing on the ASX without mentioning Commonwealth Bank of Australia.
The bank has built a reputation as the highest-quality lender in Australia thanks to its dominant deposit base, strong technology platform, and disciplined approach to lending.
CBA’s dividend yield may not look spectacular at first glance because the share price has rallied strongly over the past few years. However, it still provides a healthy income stream.
Consensus estimates currently point to a fully franked dividend of about $5.20 per share in FY2026. Based on the current CBA share price of $171.09, that implies a yield of a little over 3%, before taking franking credits into account.
For income investors, those franking credits make a meaningful difference. They can significantly boost the effective yield on an after-tax basis.
What I like most about CBA is the consistency. Banks will always face economic cycles, but CBA has shown time and again that it can generate strong profits and maintain dividends through changing conditions.
Sonic Healthcare Ltd (ASX: SHL)
Another ASX dividend stock that stands out to me is Sonic Healthcare.
Sonic operates one of the world’s largest medical diagnostics businesses, with laboratories and pathology services across Australia, Europe, and the United States.
Healthcare demand tends to be relatively stable, which helps make Sonic’s earnings more predictable than many other industries. That stability can translate into reliable dividends over time.
Consensus forecasts currently suggest Sonic could pay partially franked dividends of around $1.10 per share this financial year. With its shares trading at about $21.28, that equates to a dividend yield of just over 5%.
In my view, the combination of defensive healthcare demand and a solid dividend yield makes Sonic an appealing option for income-focused investors.
Harvey Norman Holdings Ltd (ASX: HVN)
The third ASX dividend stock on my list is Harvey Norman.
Retail businesses can sometimes produce strong dividends when they are run conservatively and generate healthy cash flow. I think Harvey Norman is a good example of that.
The company’s unique franchise model allows it to earn income from both retail operations and property ownership. That property exposure has historically provided a strong asset backing for the business.
Consensus estimates predict Harvey Norman will pay around 31 cents per share in fully franked dividends this year. With the share price currently around $5.24, that represents a dividend yield of roughly 6%.
For investors seeking higher income, that yield could be particularly appealing.
Foolish takeaway
Dividend investing isn’t just about chasing the highest yield. In my experience, the best income stocks are usually backed by strong businesses that can keep generating cash flow year after year.
Commonwealth Bank, Sonic Healthcare, and Harvey Norman each offer a combination of income potential and established business models. For that reason, they are three ASX stocks I think are worth considering.
The post My 3 best ASX dividend-focused stocks to buy in March appeared first on The Motley Fool Australia.
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- Sell alert! Why this expert is calling time on Harvey Norman shares
- 3 Australian shares to buy if the ASX pulls back 10%
Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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 positions in and has recommended Harvey Norman. 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.