With higher interest rates pressuring capital gains, ASX shares offering regular passive income have been rising on investors' radars.
If I were looking to build up a passive income stream from ASX shares, I'd keep my focus on stocks trading on the S&P/ASX 200 Index (ASX: XJO). Not only is there more readily available research for these bigger companies, but they tend to be less volatile than small-caps.
I'd also stick to ASX 200 shares with long track records of making two dividend payments each year. And I'd strongly lean towards stocks providing fully franked dividends. That way, when the tax man comes knocking, I may well be able to hold onto more of the passive income they've doled out.
With that said, here's why these two ASX shares stand out for me.
Two ASX shares delivering market-beating passive income
Before moving on to the stocks in question, it's important to note that past performance is no guarantee of future performance.
The dividend yields we look at below are trailing yields based on the past 12 months of dividend payments. Future payments may be higher or lower, depending on a range of company-specific and macroeconomic factors.
With that said, the first ASX share I'd target for passive income with my $5,000 is Woodside Energy Group Ltd (ASX: WDS).
On the back of surging energy prices, the ASX 200 oil and gas stock paid a record-high interim dividend of $1.60 per share on 6 October. Woodside shares also delivered an all-time high final dividend of $2.15 per share. Eligible investors will have seen that land in their bank accounts on 5 April.
All told, Woodside paid out $3.75 per share over the full year. That equates to a trailing yield of 11.0%.
The second ASX share I'd target for passive income with my $5,000 investment is BHP Group Ltd (ASX: BHP).
BHP paid a final dividend of $2.552 per share on 22 September. BHP shares delivered an interim dividend of $1.364 per share. If you own shares, you'll have received that payout on 30 March.
Rounding off the numbers, the full-year passive income paid out by BHP comes to $3.92 per share.
Dividends from the ASX 200 iron ore miner have come down from the all-time highs of 2021. But it still trades on a very healthy, fully franked trailing yield of 8.8%.
Assuming I split my $5,000 investment evenly between the two, I'd be looking at a trailing yield of 9.9%.
Or $495 a year in passive income from these two ASX shares, with some potential tax benefits and share price gains ahead.
