Unlocking High-Yield Opportunities: 3 ASX Dividend Stocks Offering Yields Up to 9.8% in a Volatile Market

In an era of economic uncertainty, where central banks grapple with inflation and global markets oscillate between optimism and caution, income-focused investors are increasingly drawn to dividend-paying equities. High-yield stocks, when carefully selected, can provide both a buffer against volatility and a source of compounding returns. However, the key lies in identifying companies with robust fundamentals, sustainable payout ratios, and resilient business models. Below, we analyze three ASX-listed stocks that stand out for their ability to deliver attractive yields while maintaining financial discipline.

1. Helia Group Limited (HLI): A Mortgage Insurance Powerhouse

Helia Group, formerly Genworth Mortgage Insurance Australia, dominates the lenders' mortgage insurance sector with a dividend yield of 16.31% as of August 2025. This yield is underpinned by a dividend cover ratio of 2.25, indicating that earnings comfortably exceed dividend obligations. The company's recent announcement of a 10% share buyback program over the next 12 months further signals confidence in its capital structure and long-term value creation.

Helia's business model benefits from a structural demand for mortgage insurance in a housing market where lending growth remains robust. Its prudent risk management and strong balance sheet—backed by a AAA credit rating—make it a rare combination of high yield and low risk. For investors, the challenge is to assess whether the company can maintain its margins amid potential regulatory shifts or economic downturns.

2. Tower Limited (TWR): Insuring Against Uncertainty

Tower Limited, a New Zealand-based insurer with a 8.63% yield, exemplifies the value of operational agility in volatile markets. The company has leveraged digital transformation to reduce claims processing costs by 15% year-to-date, while strategic pricing increases have bolstered profitability. Its dividend cover ratio of 2.53 underscores the sustainability of payouts, even in a low-growth environment.

Tower's focus on niche insurance segments—such as motor, home, and small business—positions it to capitalize on shifting consumer preferences. The company's recent foray into AI-driven underwriting and claims management not only enhances efficiency but also strengthens its competitive moat. For income investors, Tower's disciplined approach to capital allocation and its ability to navigate cyclical risks make it a compelling addition to a diversified portfolio.

3. New Hope Corporation Limited (NHC): Energy Sector Resilience

New Hope Corporation, a coal and oil and gas producer, offers a yield of 9.03%, supported by a payout ratio of 61.4% from earnings and 70.5% from cash flows. While energy stocks are often seen as cyclical, New Hope's operations are anchored by long-term contracts with major Asian markets, ensuring stable cash flows. The company's current valuation—trading at a significant discount to estimated fair value—presents an opportunity for investors willing to tolerate sector volatility.

What sets New Hope apart is its balance between capital discipline and operational flexibility. The firm has reinvested in higher-margin projects while maintaining a strong liquidity position. Its recent board restructuring and strategic focus on cost optimization further enhance its appeal. For those seeking energy exposure with a yield, New Hope's combination of sectoral strength and financial prudence is hard to ignore.

The Case for Caution and Diversification

While these three stocks offer compelling yields, their performance is not immune to macroeconomic headwinds. Helia's exposure to housing market fluctuations, Tower's reliance on pricing power, and New Hope's dependence on global energy demand all require careful monitoring. Investors should also consider sector diversification to mitigate concentrated risks.

The broader lesson here is that high yields are not inherently safe. A yield of 9.8% is attractive, but it must be supported by earnings, cash flows, and a management team committed to long-term value. In a world of persistent uncertainty, the most prudent strategy is to prioritize quality over yield alone.

For those willing to do the homework, the ASX's high-yield universe holds gems that can weather storms while delivering consistent income. As always, aligning these investments with personal risk tolerance and time horizons remains paramount.