Top ASX passive income shares to buy before June 30

Hoping for some extra income in the new financial year?

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It's almost that time of year again – the moment of truth of whether it will be a bill or a refund from the Australian Taxation Office. Either way, passive income from shares can make tax season less of a burden.

In Australia, we have the added bonus of franking credits, a tax benefit not available to investors in most countries. Depending on the amount of franking and the person's tax bracket, this situation can sometimes contribute to a tax refund – making ASX dividend-paying shares popular among retirees.

Even without the tax benefit, a little extra income from dividends can be handy if a bill arises.

We asked our Foolish writers which ASX passive income shares they think are worth snapping up before FY24 draws to a close.

Here is what the team came up with:

6 best ASX dividend stocks for June 2024 (smallest to largest)

  • Collins Foods Ltd (ASX: CKF), $1.09 billion
  • Deterra Royalties Ltd (ASX: DRR) $2.14 billion
  • Super Retail Group Ltd (ASX: SUL), $3.13 billion
  • Vanguard Australian Shares High Yield ETF (ASX: VHY), $3.74 billion
  • Steadfast Group Ltd (ASX: SDF), $6.56 billion
  • Woodside Energy Group Ltd (ASX: WDS), $52.33 billion

(Market capitalisations as of market close 21 June 2024).

Why our Foolish writers love these ASX passive income shares

Collins Foods Ltd

What it does: Collins Foods is a KFC franchisee operator in Australia, Germany, and the Netherlands. It also operates Taco Bell outlets in Australia.

By Tristan Harrison: When considering ASX passive income shares to buy, I like to see a stable dividend, growing profit, and a decent starting yield. On that basis, I think the Collins Foods share price looks very appealing right now after dropping by around 20% since the beginning of 2024 and also boosting its prospective dividend yield.

Collins Foods has grown its dividend every year since 2014, with the last two passive income payments amounting to 27.5 cents per share, compared to 11 cents per share paid during 2024 – that's a rise of 150%.

The company is delivering profit growth via expanding its store network in Australia and Europe and delivering solid same-store sales (SSS) growth. In the FY24 first-half period, KFC Australia SSS growth was 6.6% and KFC Europe SSS growth was 8.8%.

Collins Foods' continuing operations revenue rose 14.3% to $696.5 million, and underlying net profit after tax (NPAT) rose 28.7% to $31.2 million. This demonstrated good growth and rising profit margins.

According to Commsec estimates, the company is projected to pay a grossed-up dividend yield of 4.2% in FY24 and 5.7% in FY26. The company is valued at around 13x FY26's estimated earnings. 

Motley Fool contributor Tristan Harrison owns shares of Collins Foods Ltd.

Deterra Royalties Ltd

What it does: Deterra Royalties doesn't sell a product or service. Instead, this Perth-based company clips the ticket on mining operations where it holds a royalty. Its most material source of income is its 1.232% royalty on revenue from the Mining Area C (MAC) iron ore mine, owned by BHP Group Ltd (ASX: BHP).

By Mitchell Lawler: After last week's changes, some investors might be dumping Deterra from the passive income pile. 

The company has updated its dividend policy, revising its payout ratio from 100% to "a minimum of 50%" for FY25 and onwards. Hence, the lucrative yield of 7.7% could soon be slashed to a more modest return. 

However, I see this as a major positive for long-term shareholders. The change should allow Deterra to redeploy some capital to acquire additional royalty assets, reducing the company's reliance on the MAC royalty. 

Deterra is already taking steps in this direction with its recent acquisition of Trident Royalties, which adds 21 royalty and royalty-like offtake assets to its portfolio.

Motley Fool contributor Mitchell Lawler does not own shares of Deterra Royalties Ltd.

Super Retail Group Ltd

What it does: Super Retail is the company behind many of Australia's most successful recreational retail chains. Its brands include Super Cheap Auto, Rebel, and BCF.

By Sebastian Bowen: If you're after an investment with significant passive income potential in the dying days of the 2024 financial year, I think Super Retail shares should at least be on your shortlist. This company runs some of the best and most resilient retailing chains around.

Unlike most consumer discretionary companies, the likes of BCF and Super Cheap Auto are famous for their resilience to economic maladies like recession and inflation — a great attribute for an income stock.

I think Super Retail shares are looking attractive right now, too. Since February, this company's stock has lost around 20% of its value. While this has been painful for existing investors, it has also boosted the Super Retail dividend yield to more than 5.5%. This company's dividends typically come with full franking credits attached as well, so investors are looking at a grossed-up yield of almost 8%. 

For solid income, I think ASX investors could do a lot worse this June.

Motley Fool contributor Sebastian Bowen does not own shares of Super Retail Group Ltd.

Vanguard Australian Shares High Yield ETF

What it does: The Vanguard Australian Shares High Yield exchange-traded fund (ETF) seeks to track the return of the FTSE Australia High Dividend Yield Index.

By James Mickleboro: I think the Vanguard Australian Shares High Yield ETF could be a great option for income investors this month. Especially those who are not fans of stock-picking.

That's because this ETF eliminates the need for investors to pick stocks. Instead, it allows you to buy a collection of the highest-yielding ASX dividend shares in one fell swoop. This means you will be buying a slice of the big four banks, Australia's large-cap miners, and a host of other dividend payers.

It is also important to note that the ETF operates with strict rules with respect to diversification. It limits the proportion invested into any one industry to 40% of the total ETF and 10% for any one company. This ensures you're not overly exposed to any particular part of the market.

At present, the ETF trades with a dividend yield of 5.3%.

Motley Fool contributor James Mickleboro does not own units of the Vanguard Australian Shares High Yield ETF.

Steadfast Group Ltd

What it does: Steadfast is the largest general insurance brokerage firm in Australasia. It works with independent brokers and supports them with technology, market access, and other business tools. 

By Kate Lee: For those seeking a passive income stream, consistency in dividends is an important consideration. Steadfast boasts a long history of dividend growth, consistently raising its dividends over a decade.

The company's strong earnings growth has supported this amazing dividend growth over time. Earnings-per-share (EPS) has risen from 7 cents in FY16 to 19 cps in the past 12 months to December 2023. 

I think now is an excellent time to buy this consistent performer as the Steadfast share price has been weak recently, falling about 8% from a year ago. After the drop, Steadfast shares are trading at 19x its FY25 earnings estimates, based on S&P Capital IQ, at a midpoint of its trading history.

Based on the share price of $5.93 at the close of trade on Friday, Steadfast offers a fully-franked dividend yield of 2.66%.

Motley Fool contributor Kate Lee does not own shares of Steadfast Group Ltd.

Woodside Energy Group Ltd

What it does: Woodside is Australia's largest independent dedicated oil and gas producer. The company has a portfolio of high-quality assets in Australia, the Gulf of Mexico, the Caribbean, Senegal, and Timor-Leste. Woodside continues to actively explore new oil and gas deposits.

By Bernd Struben: With the Woodside share price down 22% over the past year, I think investors buying at current levels are likely to reap an outsized passive income stream for years to come.

Despite the ongoing shift to EVs and renewables, global oil demand is forecast to hit another record high this year. And more nations are embracing gas to provide reliable baseload power.

The ASX 200 energy stock recently caught some headwinds, with Q1 2024 production down 7% year on year. But Woodside maintained its full-year guidance of 185 million to 195 million barrels of oil equivalent.

Last week, the company also achieved a key milestone: pumping its first oil from the Sangomar field offshore of Senegal. The project's nameplate capacity stands at 100,000 barrels per day.

And with Woodside's offshore Scarborough LNG project on track for first production in 2026, the longer-term production outlook looks strong.

As for that passive income, Woodside shares trade on a fully franked trailing yield of 7.85%.

Motley Fool contributor Bernd Struben does not own shares of Woodside Energy Group Ltd.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Steadfast Group and Super Retail Group. The Motley Fool Australia has recommended Collins Foods and Vanguard Australian Shares High Yield ETF. 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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