ASX dividend shares are a great source of passive income. With rising interest rates, many investors might be turning to the 'safety' of cash investments like term deposits in their search for yield in 2023. But I still believe high-yielding ASX dividend shares are a better choice for most investors.
Not only does a quality dividend share tend to raise its payouts at least in line with inflation, but you also get other benefits like capital growth potential and franking credits.
But there are hundreds of dividend shares to choose from on the ASX, making the choice difficult. So today, let's discuss three high-yielding ASX dividend shares that could be useful for investors looking to build a stream of passive income.
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3 ASX dividend shares offering solid passive income today
Coles Group Ltd (ASX: COL)
In the nearly-five years or so Coles has been listed on the ASX in its own right, it has built up an impressive track record when it comes to fully-franked dividends. Back in 2019, Coles forked out a total of 35.5 cents per share. But over the past 12 months, this has risen to 66 cents per share.
Investors love Coles for its defensive qualities and resistance to inflation. This has been proven by Coles' ability to raise its dividends even in the midst of COVID-ravaged 2020. Today, this ASX 200 blue-chip share is offering a fully-franked trailing yield of 3.67%.
National Australia Bank Ltd (ASX: NAB)
The ASX 200 bank shares are famous for their fat dividends, and NAB certainly doesn't disappoint in this regard. NAB has also been raising its shareholder paycheques in recent years. Its most recent dividend – an interim payout of 83 cents per share, fully franked – was a pleasing rise over last year's corresponding dividend of 73 cents per share.
Despite these rising dividends, investors have cooled on most ASX banks this year. Today NAB remains down by around 12.5% in 2023 so far. But this has pushed NAB's dividend yield above 6%. As such, it's hard to ignore the passive income potential of this ASX dividend share at present.
Lottery Corporation Ltd (ASX: TLC)
This is one of the ASX 200's newer shares, having been spun out of Tabcorp Holdings Ltd (ASX: TAH) just last year. But Lottery Corp is another ASX dividend share brimming with potential. It is another company that is inherently defensive, with a monopolistic holding over lottery and Keno licensing across most states of Australia.
These products tend to be relatively inelastic, meaning that customers tend to buy lottery tickets and play Keno in search of a jackpot, regardless of the economic weather.
Lottery Corp has only paid out one dividend since its ASX debut, which was the interim dividend of 8 cents per share from March. This gives the company a trailing dividend yield of 1.56% (or 3.13% annualised) at current pricing. This could bode well for the future passive income potential of this ASX 200 share.
