Blue-chip ASX dividend shares can be great picks for passive income, particularly if the share price has dropped.
A lower share price can significantly boost a company's dividend yield. For example, if the dividend yield is 6% and the share price falls 10%, the yield becomes 6.6%. A lower share price also improves the value on offer for new investors.
Blue-chip stocks typically have a strong market position and generate fairly stable profits, and perhaps pay consistent dividends even when conditions are tougher.
Here are two blue-chip ASX dividend shares that have fallen significantly and now offer large dividends.
APA Group (ASX: APA)
As the chart below shows, the APA share price has fallen by 43% since August 2022 — a significant decline for its type of business.
APA owns a vast gas pipeline across Australia, connecting various points of supply around the country to end markets. APA transports around half of the country's gas usage, playing an important role in Australia's energy mix.
The company also has several other energy-related assets, such as electricity transmission, wind farms, solar farms, gas processing facilities, gas storage, and gas-powered energy generation.
High interest rates are a headwind for its profit growth, but the business has still been able to grow its dividend distribution over the last few years.
In fact, APA has grown its distribution every year since 2004. That's one of the most appealing elements to me about the company. It has been a very reliable dividend payer, although that's not guaranteed to continue (forever).
APA aims to grow its cash flow by expanding its energy portfolio, which includes new pipelines.
Energy is essential in Australia, and gas is expected to play an important part in the energy mix for at least the next three decades.
The blue-chip ASX dividend share is expected to grow its annual distribution by 1.8% to 57 cents per security. That translates into a forward distribution yield of 8.3%.
Endeavour Group Ltd (ASX: EDV)
This isn't a company I'd normally look at, but Endeavour hit a 52-week low of $4.08 on Friday, and the dividend yield has climbed significantly. As the chart below shows, the Endeavour share price has fallen 26% since 23 August 2024 and a hefty 50% since 19 August 2022.
This is the business behind Dan Murphy's, BWS and ALH Hotels. Dan Murphy's and BWS are two of the largest liquor businesses in Australia, while ALH Hotels operates a portfolio of more than 350 licensed venues across Australia.
As such, I'd describe Endeavour as fairly defensive and resilient, even if sales growth is challenged right now in the current elevated cost of living environment. In the first quarter of FY25, the company produced sales growth of 0.5%, thanks to 2.5% growth for the hotels segment.
The blue-chip ASX dividend share started paying a dividend in 2021, grew it in 2022 and hiked the payout again in FY23 to 21.8 cents per share. The company maintained the payout at 21.8 cents per share in FY24.
According to the forecasts on Commsec, the Endeavour share price is valued at 15x FY25's estimated earnings and it could maintain its dividend at 21.8 cents per share. This translates into a projected grossed-up dividend yield of 7.6%, including franking credits. That's a strong yield, in my opinion.
