2 ASX High-Yield Dividend Stocks That Still Look Cheap

In a market dominated by growth stories and tech excitement, income-focused investors are quietly hunting for a different kind of opportunity — steady dividends and good value. Finding companies that offer both sustainable yields and attractive valuations, however, isn’t always easy.

On the ASX, Helia Group Ltd (ASX: HLI) and Adairs Ltd (ASX: ADH) stand out as two companies that tick both boxes. They deliver high, well-supported dividends while still trading at modest valuations, offering investors the potential for reliable income and capital appreciation. For income investing Australia readers in 2025, here’s why these two dividend gems deserve a closer look this year.

Helia Group Ltd (ASX: HLI): High Dividend Yield ASX 2025 Value Play

What Helia does and why demand is steady

Helia Group, formerly known as Genworth Mortgage Insurance Australia, is Australia’s leading lender mortgage insurance (LMI) provider. The company plays a critical role in the housing market, helping banks and homebuyers manage mortgage risk — a service that remains in steady demand even during market volatility.

Strong financial performance in 1H FY2025

For the half year ended June 2025, Helia reported impressive numbers:

• Statutory net profit after tax (NPAT): $133.7 million — up 38% year-over-year
• Underlying NPAT: $126.1 million — an 18% increase
• Insurance revenue: Expected in the range of $350 million to $390 million for FY25
  This strong result was driven by solid housing activity, resilient lending volumes, and disciplined underwriting. Despite interest rate uncertainty, Helia continues to deliver consistent earnings growth — a sign of strength in a highly regulated financial space.

Dividend and valuation appeal for yield seekers

What’s most appealing for income investors is Helia’s commitment to rewarding shareholders.

• The company declared a fully franked interim dividend of 16 cents per share, up 7% year-over-year.
• In addition, it paid a special unfranked dividend of 27 cents, showcasing confidence in its cash position.
  Helia’s dividend yield comfortably exceeds 8%, putting it among the top-yielding stocks in the financial sector. Even better, the company maintains a low payout ratio, ensuring dividends remain well-covered by profits.

From a valuation perspective, Helia trades at a price-to-earnings (P/E) ratio of around 5.5x, which is significantly below the sector average of roughly 10–12x. With a return on equity (ROE) near 24%, this combination of strong profitability and low valuation makes it a standout value play for dividend seekers researching dividend yield ASX 2025 opportunities.

Why Helia looks attractive for 2025

Helia’s balance sheet is solid, with ample regulatory capital and strong free cash flows. The company benefits from a structurally supported industry — lenders require mortgage insurance for high loan-to-value loans, ensuring steady demand. As the property market stabilizes and refinancing activity continues, Helia’s consistent cash generation positions it to maintain or even grow its dividend payout in the coming years — a compelling setup for investors seeking cheap dividend stocks ASX without sacrificing quality.

Adairs Ltd (ASX: ADH): Undervalued Dividend Shares Australia

Brand portfolio and market positioning

Adairs Ltd operates one of Australia and New Zealand’s most recognizable home furnishings brands. Known for stylish yet affordable products, the company runs Adairs, Mocka, and Focus on Furniture — all targeting different segments of the home lifestyle market.

Resilient business model and FY2025 metrics

Despite a challenging retail environment marked by inflation and cautious consumer spending, Adairs has managed to hold its ground. For FY2025, the company reported:

• Total revenue: $618.1 million, up 4% year-over-year
• Underlying EBIT: Forecast between $53.5 million and $57 million
• Net profit after tax (NPAT): $25.7 million
• Earnings per share (EPS): 15 cents
  Adairs’ ability to post top-line growth in a soft retail market speaks to its strong brand recognition and loyal customer base. The company has focused on cost efficiency, inventory management, and growing online sales — now a key contributor to profitability.

Steady dividends and value pricing

Adairs has built a strong reputation for rewarding shareholders with regular, fully franked dividends. The company currently offers a dividend yield around 5%, backed by stable earnings and prudent capital allocation. Even after accounting for macroeconomic pressures, Adairs’ balance sheet remains sound, and cash generation is consistent. Its shares continue to trade at a P/E ratio below 9x, leaving room for potential re-rating as consumer sentiment improves. For investors scanning undervalued dividend shares Australia wide, Adairs presents a practical, cash-generative name at a reasonable multiple.

Why Adairs looks attractive for 2025

Adairs benefits from its position in the defensive retail sector — homewares and furnishings tend to see stable demand even during economic slowdowns, as consumers prioritize home improvement over discretionary splurges. With inflation easing and consumer confidence expected to recover through 2025, Adairs could see both earnings growth and dividend sustainability improve. Its combination of brand strength, cost control, and value pricing makes it a solid addition for those filtering ASX high dividend stocks with room for re-rating.

Income Investing Australia — Cheap Dividend Stocks ASX

Income and value in one package

In a world where many dividend stocks look expensive, Helia Group Ltd (ASX: HLI) and Adairs Ltd (ASX: ADH) represent two rare finds — high-yield stocks that still trade at attractive valuations. Helia offers investors a slice of the mortgage insurance market with consistent earnings, growing dividends, and strong capital management. Adairs, on the other hand, provides dependable income through its well-known retail brands, solid cash flow, and disciplined operations.

Positioning a portfolio for dividends in 2025

For income investors looking to balance yield and value, these two ASX-listed names offer an appealing combination of dividend stability, growth potential, and bargain pricing. If the focus is building a diversified list of cheap dividend stocks ASX investors can hold through cycles, both Helia and Adairs merit a spot on the watchlist — particularly for anyone benchmarking against dividend yield ASX 2025 peers.

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