2 High Yield Dividend Stocks That Still Look Cheap

In today’s uncertain market, investors are constantly on the lookout for opportunities that offer not just steady income but also value. With interest rates fluctuating and market volatility remaining high, dividend-paying stocks have become a safe haven for investors seeking stability and consistent returns.

Among the many options available on the ASX, New Hope Corporation (ASX: NHC) and Helia Group Ltd (ASX: HLI) stand out as two high-yield dividend plays that continue to trade at attractive valuations. Both companies have demonstrated strong profitability, disciplined financial management, and the ability to sustain healthy dividends—making them excellent picks for income-focused investors.

New Hope Corporation: Coal’s Reliable Dividend Play

New Hope Corporation is one of Australia’s most consistent dividend payers, operating across coal mining, oil and gas exploration, and logistics. Despite growing global attention toward renewable energy, New Hope has managed to thrive by maintaining efficient operations and delivering impressive cash flows.

Financial Highlights

1. FY25 Revenue: Approximately $1.75 billion, stable compared to the previous year.
2. Net Income: $439.4 million, only slightly lower than FY24’s $475.9 million.
3. EBITDA Margin: 48.6%, highlighting the company’s strong operational efficiency.
4. Fully Franked Dividend Yield: Around 8.5%, including a final dividend of 15 cents per share payable on October 8, 2025.
5. Price-to-Earnings (P/E) Ratio: Roughly 7.9x, indicating the stock remains attractively valued.

New Hope’s ability to maintain strong margins even in a challenging coal market is impressive. The company benefits from efficient cost structures, long-term supply contracts, and disciplined reinvestment in its core assets.

While coal may not be the most fashionable sector in a decarbonizing world, the reality is that global energy demand—especially in developing regions—still supports coal’s role in the energy mix. New Hope has been careful to balance this with strategic investments in logistics and energy-related ventures, which diversify its income streams.

For investors seeking high yield with stability, New Hope offers exactly that. Its fully franked dividends not only provide consistent income but also enhance after-tax returns for Australian investors. The stock’s relatively low valuation further adds to its attractiveness, offering both yield and potential capital upside if coal prices remain firm.

Helia Group Ltd: Leadership in Mortgage Insurance with Growth Upside

Helia Group Ltd (ASX: HLI), formerly known as Genworth Mortgage Insurance Australia, is Australia’s leading lender’s mortgage insurer (LMI). The company plays a critical role in the housing finance ecosystem by protecting banks against borrower defaults on high loan-to-value ratio (LVR) mortgages—typically above 80%.

Helia’s business model benefits from both strong premium income and conservative capital management. Despite headwinds in the property market, Helia has consistently delivered solid results and continues to reward shareholders with generous dividends.

Financial Highlights

1. H1 FY25 Revenue: $249.8 million, supported by strong premium growth.
2. Statutory Net Profit After Tax: $133.7 million for the first half of FY25, marking a 38% increase from the prior half.
3. Fully Franked Interim Dividend: 16 cents per share, up 7% year-on-year, plus an unfranked special dividend, demonstrating strong cash generation.
4. Price-to-Earnings (P/E) Ratio: Around 5.9x, well below the sector average—signaling significant undervaluation.
5. Dividend Yield: Approximately 7%, supported by a robust payout ratio.

Helia’s earnings have been boosted by favorable credit conditions, disciplined underwriting standards, and low claims experience. Moreover, the company maintains a solid capital base and has ample regulatory buffers, ensuring its ability to sustain dividends even in more volatile market cycles.

Another strength is its pricing power. As the largest player in Australia’s mortgage insurance space, Helia benefits from strong relationships with major banks and a near-monopoly in certain market segments. This gives it a unique advantage in maintaining margins while still expanding its book of business.

For investors, Helia offers a blend of yield, safety, and upside potential. Its low valuation, rising profits, and consistent dividends make it a hidden gem in the financial sector.

Why These Stocks Look Cheap Yet Rewarding

Both New Hope Corporation and Helia Group offer compelling reasons for income-focused investors to take notice in 2025. Here’s why these two stocks stand out in the current market:

1. Attractive Dividend Yields

Both companies provide dividend yields well above the ASX average, which currently hovers around 4%.

1. New Hope’s yield of ~8.5% makes it one of the top-paying stocks on the exchange.
2. Helia’s ~7% yield, combined with a special dividend, highlights management’s confidence in the company’s cash flow sustainability.

2. Reasonable Valuations

At a time when many quality income stocks are priced at premium valuations, both of these names trade at low single-digit P/E ratios—6.8x for New Hope and 4.5x for Helia. This provides a margin of safety and scope for capital appreciation if earnings momentum continues.

3. Strong Earnings Quality

These companies are not just high yielders—they’re profitable, well-managed, and cash flow rich.
New Hope’s high EBITDA margin reflects strong cost control, while Helia’s 38% earnings growth in H1 FY25 demonstrates its operational strength in a defensive industry.

4. Sector Differentiation

Diversification across sectors is key for income investors.

1. New Hope is positioned in the energy and resources sector, benefiting from ongoing global energy demand.
2. Helia, on the other hand, operates in the financial services space, offering counter-cyclical stability and consistent premium income.

Together, they provide a balanced mix of cyclical and defensive exposure—ideal for investors looking to build a resilient dividend portfolio.

Conclusion: Income Investors Should Take Notice

For investors seeking high yield with solid fundamentals, New Hope Corporation and Helia Group Ltd represent two of the most attractive opportunities on the ASX in 2025.

Both companies deliver strong, sustainable dividends, supported by healthy balance sheets, disciplined capital management, and undervalued share prices. Whether you’re an income-focused investor or someone looking to add value-oriented names to your portfolio, these stocks tick all the right boxes.

In a market where finding reliable income sources can be challenging, New Hope and Helia Group stand out as rare value-income combinations—stocks that not only pay you today but also have the potential to grow tomorrow.

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