2 ASX Dividend Stocks to Hold Forever
In a world where markets swing wildly and economic headlines change daily, some investors prefer the quiet power of stability. For income-focused investors, dividend-paying stocks offer exactly that — steady returns, peace of mind, and long-term wealth creation.
Among the many options on the Australian Securities Exchange (ASX), two names stand out for their consistency, strength, and long-term reliability: Telstra Group Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP).
These are not just dividend payers — they are dividend dynamos with business models designed to deliver sustainable income, no matter how the market moves. Let’s take a closer look at why Telstra and BHP deserve a permanent spot in your portfolio.
Telstra Group Ltd (ASX: TLS): Reliable Income in the Digital Age
For decades, Telstra has been a cornerstone of Australia’s communication network. From the early days of fixed-line telephones to today’s 5G and fiber-driven world, Telstra has continuously evolved — and rewarded shareholders along the way.
Strong Dividend History
In FY25, Telstra paid a fully franked final dividend of 9.5 cents per share, taking total dividends for the year to 19 cents. That’s a 5.6% increase from the previous year, reaffirming its commitment to steady income growth.
What’s impressive is Telstra’s consistency — even during challenging economic conditions, the company has maintained or grown its dividends, supported by its strong cash generation and leadership in the telecom sector.
Attractive Yield and Payout Stability
At current share prices, Telstra’s dividend yield sits around 4%, and forecasts suggest it could climb toward 4.6% in 2026 as earnings expand.
While the company’s payout ratio temporarily exceeded 100% in FY25 due to elevated capital returns, management expects it to normalize around 74% in FY26. This move signals a sustainable dividend strategy that balances investor rewards with reinvestment for growth.
Cash Flow Strength
Telstra’s EBITDA jumped 14% in FY25 to $8.6 billion, underpinned by robust performance in mobile, enterprise, and network segments. Its operating cash flow comfortably supports both dividends and share buybacks — a clear indicator of financial health.
Defensive Moat and Growth Outlook
In a digital-first world, connectivity has become as essential as electricity. Telstra’s dominance in mobile, broadband, and enterprise data gives it a defensive moat that’s hard to replicate. Its 5G rollout, growing fiber network, and international expansion continue to position it for sustainable long-term earnings.
In short, Telstra is the kind of stock that lets you sleep well at night — reliable income, resilient business, and predictable growth.
BHP Group Ltd (ASX: BHP): The World’s Resources Powerhouse
If Telstra is Australia’s tech backbone, BHP Group Ltd is its global powerhouse. As one of the world’s largest diversified miners, BHP generates massive profits, strong cash flows, and consistent dividends from commodities that drive the modern economy.
Consistent and Generous Payouts
For FY25, BHP declared a final dividend of US$0.60 per share, bringing total annual dividends to US$1.10. That translates to a 55% payout ratio, slightly above the company’s traditional 50% minimum policy.
For Australian investors, once you include franking credits, BHP’s grossed-up yield sits between 5.3% and 5.6%, making it one of the most rewarding blue-chip dividend stocks on the ASX.
Diversified Portfolio for Stability
What makes BHP truly remarkable is its diversification. Its operations span iron ore, copper, coal, and now potash, ensuring that even if one commodity dips, others can support the balance sheet. This diversification gives BHP the ability to maintain stable dividends even through volatile commodity cycles.
Production and Financial Strength
BHP’s FY25 iron ore output hit 263 million tonnes, beating its own guidance — a testament to operational efficiency. The company also maintains one of the strongest balance sheets in the sector, backed by low operating costs and disciplined capital management.
This financial strength gives BHP flexibility — whether it’s funding new growth projects, investing in future-facing commodities like copper and potash, or maintaining its generous dividend payouts.
Future-Focused Growth
While iron ore remains the cornerstone of BHP’s profits, the company is strategically shifting toward copper and potash — commodities aligned with two global megatrends: electrification and food security.
Copper demand is soaring due to electric vehicles, renewable energy grids, and data center infrastructure. Meanwhile, potash is crucial for sustainable agriculture and global food supply. These shifts not only support long-term earnings growth but also ensure dividend resilience for decades to come.
Why These Stocks Deserve a Place in Every Long-Term Portfolio
So, what makes Telstra and BHP “hold forever” stocks?
Let’s break it down:
1. Long-Term Resilience
Both companies have proven their ability to thrive across economic cycles. Telstra’s defensive telecom model and BHP’s commodity diversification offer a balance of stability and opportunity.
2. Growing Dividends
Neither company is content with maintaining dividends — they focus on growing them. Telstra’s consistent dividend increases and BHP’s flexible payout policy ensure shareholders enjoy real income growth over time.
3. Diversified Income Sources
Together, these two giants offer exposure to both essential services (telecom and data infrastructure) and global resources (minerals and energy). This combination creates a powerful diversification effect in any investment portfolio.
4. Fully Franked Dividends
For Australian investors, the cherry on top is the fully franked dividends. These reduce tax liabilities and boost after-tax returns, making both Telstra and BHP particularly attractive for long-term, income-seeking investors.
Final Thoughts
When it comes to building wealth steadily and sustainably, few ASX stocks match the long-term reliability of Telstra Group Ltd and BHP Group Ltd.
Telstra offers steady income in a digital world, powered by recurring revenues and unmatched network strength. BHP delivers global exposure and high yields, driven by world-class assets and smart capital allocation.
Both companies boast fortress balance sheets, strategic growth plans, and a history of rewarding shareholders, making them ideal “buy and hold forever” stocks.
In a market often obsessed with short-term gains, these two remind us that patience pays — especially when it’s backed by dependable dividends and enduring strength.
For investors seeking peace of mind, Telstra and BHP aren’t just stocks — they’re long-term partners in financial security.
Disclaimer:
General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.
Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.
Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.
