2 top ASX 200 dividend shares I'd target now for a $200 weekly passive income

Both ASX 200 stocks pay fully franked dividends, offering passive income investors some potential tax benefits.

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The retrace on the S&P/ASX 200 Index (ASX: XJO) over the past week presents some potentially lucrative opportunities for passive income investors.

Since the closing bell on 15 September, the benchmark index is down 3.3%.

The broader market retrace has also seen many top ASX 200 dividend shares slip.

And, in my book, that makes now an excellent time to target these two leading dividend stocks for some handy passive income.

We'll get those in a tick.

But first…

Diversification and trailing yields

We're looking at two top ASX 200 dividend stocks for passive income.

While I believe both of these companies deserve a place in any income portfolio, a well-diversified portfolio should contain more than just two stocks. While there's no magic number, 10 stocks operating in a variety of sectors is a reasonable ballpark figure to start with.

Also, note that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.

With that said…

Two leading ASX passive income shares

The first company I'd target today for my $200 a week ($10,400 a year) in passive income is BHP Group Ltd (ASX: BHP).

The ASX 200 iron ore miner has a lengthy track record of paying two fully franked dividends per year. And with the BHP share price down 5.4% since the closing bell on 18 September, I believe now represents a good long-term entry point.

BHP's dividends have come down this past year from the record payouts in FY22. But the iron ore price has been resilient in recent months, which should help support the outlook for future payouts.

As for the past 12 months of passive income, BHP paid a total of $2.62 per share in fully franked dividends.

At yesterday's closing share price of $43.30, that equates to a trailing yield of 5.9%.

Moving out of the resources space, the next ASX share I'd target today for my $200 weekly passive income is Westpac Banking Corp (ASX: WBC).

The ASX 200 bank stock's dividends have been increasing over the past three years. And, like BHP, with the Westpac share price down 3.4% since 18 September, this looks like a good long-term entry point to me.

Over the past 12 months, Westpac has delivered a total of $1.34 per share in fully franked dividends.

At the current Westpac share price of $21.05, that equates to a trailing yield of 6.4%.

To the maths!

Okay, let's crunch some numbers.

If I buy an equal amount of both stocks, I'll earn an average trailing yield of around 6.2%.

To reach my goal of a $200 weekly passive income, or $10,400 annually, I'd then need to invest $167,742 today.

Now, that's a sizeable investment to make all in one go.

But that's okay.

I can also make smaller, regular investments in these ASX dividend stocks each month.

In time, I'll achieve my $ 200-a-week passive income goal. Then I'll just need to decide whether to reinvest those proceeds or spend the money as it comes in.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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