BHP Group Ltd. (ASX: BHP) is one of the largest and most well-known companies on the Australian Stock Exchange (ASX). Its strong dividend payments have made it a favourite for income-seeking investors. However, BHP’s dividends are often tied to the ups and downs of the commodities market, making them inconsistent. For those looking for steady and reliable dividends, there are other attractive options on the ASX that could be better picks. In this article, we’ll look at three dividend stocks that I’d consider buying over BHP right now: MFF Capital Investments Ltd (ASX: MFF), Endeavour Group Ltd (ASX: EDV), and Regal Partners Ltd (ASX: RPL).
1. Endeavour Group Ltd (ASX: EDV)
Endeavour Group is another ASX-listed company that could be a strong contender for dividend investors. Known for its leadership in the Australian alcohol retail market, Endeavour owns big names like Dan Murphy’s and BWS, as well as over 350 hotels under the ALH Hotels brand. The company operates in a defensive sector—alcohol retail and hospitality—which tends to perform well regardless of economic conditions.
Goldman Sachs has a positive outlook on Endeavour Group’s potential for growth, especially as it continues to expand its market share and reopen its hotels post-COVID. The broker expects Endeavour to deliver fully franked dividends of 22 cents per share in FY 2025, rising to 24 cents in FY 2026. With a current share price of $4.84, these forecasts translate into solid dividend yields of 4.5% in FY 2025 and 5% in FY 2026. The steady and defensive nature of Endeavour’s business makes it a compelling option for investors seeking stable dividends, unlike the cyclical nature of BHP’s payouts.
2. MFF Capital Investments Ltd (ASX: MFF)
MFF Capital Investments is a listed investment company (LIC) that has shown solid performance in recent years. Unlike BHP, which depends heavily on the cyclical nature of commodity prices, MFF focuses on investing in high-quality global companies, primarily in the United States. This makes MFF a more stable option for dividend investors.
The company’s portfolio includes well-known names like Visa, Mastercard, Amazon, and Alphabet (Google’s parent company). What sets MFF apart is its consistent dividend growth. Since 2018, the company has increased its annual dividend every year. In 2024, MFF paid a dividend of 13 cents per share, up from just 3 cents per share in 2018. This steady rise in payouts makes MFF an appealing choice for those seeking reliable dividend income. Currently, MFF offers a dividend yield of around 3.3%, which, although lower than BHP’s, is backed by a much more stable business model.
3. Regal Partners Ltd (ASX: RPL)
Regal Partners is an alternative investment company that has been gaining attention for its strong dividend potential. The company focuses on a variety of investment strategies, including private credit investments in commercial real estate and agriculture. Regal has demonstrated impressive growth, with its assets under management (FUM) increasing due to new fund launches and strategic acquisitions, such as the recent purchase of Merricks Capital.
Regal’s profitability is bolstered by high management and performance fees, making it a financially strong company. Bell Potter, an Australian brokerage, is optimistic about Regal’s future, predicting fully franked dividends of 16.3 cents per share in FY 2024 and 18.1 cents in FY 2025. With the company’s current share price at $3.89, these dividends represent yields of 4.2% and 4.7%, respectively. The combination of a strong business model, growth potential, and attractive dividends makes Regal Partners an excellent choice for investors who want a solid dividend stock over BHP.
Why These Stocks Are Better Picks Than BHP Right Now
While BHP has a proven track record of delivering big dividends, its payouts are closely linked to the performance of the commodities market. When commodity prices fall, so do BHP’s profits and dividends. This makes BHP’s dividends less predictable and riskier for long-term income investors. In contrast, companies like MFF Capital, Endeavour Group, and Regal Partners offer more stable and reliable dividend streams, thanks to their diversified business models and less volatile industries.
MFF Capital stands out for its consistent dividend growth and global portfolio; Endeavour Group benefits from a defensive market position in alcohol retail; and Regal Partners offers attractive dividends with a strong growth outlook in alternative investments. All three companies provide a level of stability that BHP, despite its size and dominance, cannot guarantee due to its reliance on commodities.
Why Stability Beats Size in Dividend Stocks
While BHP may be a giant in the Australian market, its reliance on the unpredictable commodities sector makes its dividends less reliable. For investors seeking steady, long-term income, alternatives like MFF Capital, Endeavour Group, and Regal Partners offer a more balanced approach. Each of these companies operates in sectors that provide more stability, allowing for consistent dividend growth over time.
Rather than chasing the biggest player, it’s worth considering stocks that offer reliable payouts without the cyclical risks. By focusing on stable, growing dividends, you can build a more dependable income stream—one that isn’t at the mercy of volatile market conditions.
