If you've got $15,000 to invest, using it to build a portfolio of passive income-generating ASX dividend shares is one of the best uses of your capital in my view.
ASX shares offer everyone the chance to build wealth in a highly effective way, whilst paying you passive income in the form of dividends.
But building a bulletproof portfolio of quality ASX dividend shares is easier said than done. So today, we'll discuss five ASX shares that I think are all worthy of a $3,000 investment. Together, I think they will form the backbone of a bulletproof passive income portfolio.
Building a $15,000 passive income portfolio with 5 dividend shares
BHP Group Ltd (ASX: BHP)
First up is the 'Big Australian', BHP. BHP is one of the largest mining companies in the world, and specialises in iron ore, copper, metallurgical coal, nickel and potash. These are all commodities that the world needs to continue to develop and accommodate economic growth.
Large, mature and profitable commodity companies can be a useful hedge against inflation. They can also shower investors with dividends when commodity prices are at a high point of their cycle. BHP's glory days of 2021 and 2022 have receded somewhat.
But this company is still a passive income heavyweight, offering a trailing, and fully franked, dividend yield of over 5.5% today.
National Australia Bank Ltd (ASX: NAB)
Next up we have an ASX 200 bank for our next passive income stock. Of course, the banks have all nurtured a well-deserved reputation as dividend monsters over the past few decades. That's fair enough. All four of the big banks are strong, sound companies that enjoy several unique benefits as a result of their status as pillars of our economy.
But NAB is the pick of the bunch for me. It's arguably an inferior business to that of the universally venerated Commonwealth Bank of Australia (ASX: CBA). However, NAB shares trade at a far more reasonable valuation at present, in my view. This also means that investors get a far larger dividend yield upfront. At present, that fully franked yield is sitting at just over 5.1%
Telstra Group Ltd (ASX: TLS)
Telstra is a favourite passive income payer for ASX investors. And for good reason. This telco, which is utterly dominant in its industry, has also been funding generous dividends for decades. I like the defensiveness and resilience that Telstra brings to a dividend portfolio – just think about what most Australians would give up before their phones and internet connections.
Telstra has not cut its dividend for a number of years now (including throughout the pandemic) and even gave investors a pay rise last year. At present, Telstra shares offer a fully-franked dividend yield of 4.21%.
Coles Group Ltd (ASX: COL)
Let's turn to Coles Group. Coles is a business that has a highly prominent role in Australian society as the second-largest supermarket operator.
As a payer of passive dividend income, I like Coles as an investment for our $15,000 bulletproof portfolio for similar reasons to Telstra. Coles is a defensive company whose business tends to remain strong regardless of the economic weather. Whether inflation is high or low, or whether we're in a boom or a recession, many of us are visiting Coles at least once a week.
I prefer Coles to Woolworths Group Ltd (ASX: WOW) for our portfolio as the dividends that Coles tends to pay out typically result in a higher yield for shareholders. Right now, Coles shares are trading with a fully-franked yield of 4.15%
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Our final candidate for the $15,000 passive income portfolio is investment house Soul Patts. This company has a lot to offer investors. It runs a large, diversified portfolio made up of a variety of different assets on behalf of its shareholders. Most of those assets are stakes in large, mature ASX blue-chip shares.
This inherently offers investors a huge level of diversification, which is great news for our portfolio.
But Soul Patts is also a compelling investment in its own right. It has a decades-long history of delivering market-beating returns for investors for one. But it is also the only ASX share that can tell its investors that they have enjoyed a 23-year streak of annual dividend pay rises.
The dividend yield on Soul Patts shares is presently sitting at a fully franked yield of 2.53%. But considering this streak of dividend pay rises, I think Soul Patts is more than a worthy candidate for our portfolio's final slot.
