The Reserve Bank of Australia’s (RBA) recent decisions to cut the cash rate have intensified the spotlight on ASX income stocks, which offer attractive dividend yields for income-seeking investors. With the cash rate already reduced twice in 2025 and further cuts anticipated, traditional savings vehicles like term deposits and savings accounts are offering diminishing returns.
In this shifting financial landscape, ASX income stocks present a compelling alternative, providing not only substantial passive income but also potential growth in dividend payments over time. Among the noteworthy high-yield stocks are Centuria Office REIT (ASX: COF) and Inghams Group Ltd (ASX: ING), both offering yields exceeding 7%.
Centuria Office REIT: Navigating the Office Sector Challenges
Centuria Office REIT, a prominent real estate investment trust (REIT), manages a diverse portfolio of office buildings across Australia. As of March 31, 2025, the REIT reported a portfolio occupancy rate of 91.4% and a weighted average lease expiry (WALE) of 4.2 years, despite the ongoing challenges faced by the office sector.
Offices are priced at a lower multiple of rental profit compared to other property types like warehouses, which translates into higher distribution yields. The company is actively addressing vacancies and upcoming lease expiries, investing in refurbishments to meet tenant expectations.
“Achieving successful leasing outcomes requires capital investment towards repurposing existing fit-outs to align with tenant expectations and undertaking refurbishments to reposition assets,” the company stated.
For FY25, Centuria Office REIT anticipates generating 11.8 cents per unit of rental profit (funds from operations – FFO) and paying a distribution per unit of 10.1 cents. At the current unit price, this equates to a distribution yield of 8.1%. The stock is trading at 10.5 times its FY25 forecast rental profit.
Inghams Group Ltd: A Leader in Poultry Production
Inghams Group Ltd, one of Australia’s largest poultry producers, employs over 8,000 people and supplies major retailers, fast food chains, and food service distributors. The company holds strong market positions in the Australian turkey, stockfeed, and New Zealand dairy feed industries.
Inghams’ recent dividends total 19 cents per share, resulting in a grossed-up dividend yield of 7.7%, inclusive of franking credits. The company anticipates benefiting from lower feed costs in FY25 and plans to achieve cost savings through various operational improvements.
Inghams expects “annualised cost savings through procurement, operational and continuous improvement initiatives that will significantly contribute to offsetting general inflationary effects.”
For FY25, Inghams forecasts operating profit (EBITDA) growth between flat and 6%, with modest growth in core poultry net selling prices (NSP) expected to offset a slight reduction in volumes. According to Commsec forecasts, Inghams’ share price is trading at 11 times FY26’s estimated earnings, with a potential grossed-up dividend yield of 10.8%.
Implications and Market Outlook
The focus on high-yield ASX stocks like Centuria Office REIT and Inghams Group Ltd underscores a broader trend among investors seeking alternatives to traditional low-yield savings options. As the RBA continues to adjust monetary policy, these stocks may become increasingly attractive for their income potential and resilience in challenging market conditions.
Experts suggest that the ongoing volatility in global markets and domestic economic pressures could further enhance the appeal of dividend-paying stocks. Investors are advised to consider the stability and growth prospects of such companies, particularly in sectors that demonstrate robust demand and operational efficiency.
Looking ahead, the performance of these ASX income stocks will likely be influenced by macroeconomic factors, including interest rate trends and sector-specific dynamics. As the financial landscape evolves, these stocks may offer a viable path to achieving both income and capital growth.
