S&P/ASX 100 Index (ASX: XTO) and S&P/ASX 200 Index (ASX: XJO) shares offer a rich hunting ground for passive income investors.
ASX dividend shares are particularly appealing because, unlike the majority of their international peers, many come with franking credits.
That's especially true amongst ASX 100 and ASX 200 dividend shares, with a lot of the top companies delivering 100% franked dividends. This means I should be able to hold onto more of my passive income at tax time.
So, here are three ASX 100 and ASX 200 shares I'd buy now for a $1,820 passive income in 2024.
But first…
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Yields and diversification with ASX share portfolios
Before we dive into the three ASX passive income stocks, don't forget the importance of diversification.
While we'll look at three ASX 100 and ASX 200 stocks below, a properly diversified income portfolio should hold at least 10 companies. Ideally, these will operate across different sectors and varying geographic ranges, helping reduce the overall risk to my portfolio.
Also, bear in mind 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. But via diversification, I'm hoping that any dip in yields from one stock will be countered by a rise from another.
With that said, here are the three ASX 100 and ASX 200 stocks I'd buy now for $1,820 passive income in 2024.
Tapping the ASX 100 and ASX 200 for passive income
First up we have ASX 100 bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).
ANZ paid a fully franked interim dividend of 81 cents per share on 3 July. The bank paid a final dividend of 94 cents per share, franked at 56%, on 22 December. That equates to a total passive income payout of $1.75 per share.
At Wednesday's closing price of $28.10, ANZ trades on a partly franked trailing yield of 6.2%.
With an eye on diversification, the next ASX 200 share I'd invest in today for passive income is Woodside Energy Group Ltd (ASX: WDS).
The energy stock paid a fully franked final dividend of $2.154 per share on 5 April. Woodside delivered the interim dividend of $1.243 per share on 28 September. That works out to a full-year (rounded) payout of $3.40 per share.
At Wednesday's closing price of $30.25, this ASX 200 stock trades on a fully franked trailing yield of 11.2%.
Rounding out the list, I'd also invest in ASX 100 mining giant BHP Group Ltd (ASX: BHP) to secure my $1,820 in passive income for 2024.
BHP paid a fully franked final dividend of $1.251 per share on 28 September. Earlier this week the ASX 100 miner declared an interim dividend of 72 US cents per share (AU$1.10 per share at current exchange rates).
BHP shares trade ex-dividend on 7 March, and I can expect that payout to hit my bank account on 28 March.
Working with the current exchange rate, BHP has (or will soon have) paid $2.35 per share in dividends over 12 months. At Wednesday's closing price of $44.47, that equates to a fully franked yield (part pending, part trailing) of 5.3%.
To the maths!
If I invest an equal amount in each of these ASX 100 and ASX 200 shares, I can reasonably aim for a yield of 7.6%.
So, to generate my $1,820 in passive income in 2024, I'd need to invest $24,053 across these three companies today.
And, as always, I'll be hoping they deliver some solid share price gains across the year as well!
