The Australian share market can be a great place to generate passive income.
That's because there are quality ASX shares out there that analysts are tipping to provide investors with large dividend yields in the near term.
For example, $10,000 invested into each of the two ASX shares in this article could produce passive income of approximately $1,500 in 2025 and then $1,600 in 2026 according to analysts.
Let's see what they are saying about these buy-rated income options this month:
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IPH Ltd (ASX: IPH)
The team at Goldman Sachs thinks that the shares of IPH could be providers of big dividend yields in the near term. The broker has a buy rating and $7.50 price target on them.
IPH is a leading intellectual property (IP) services provider with operations across the globe.
Goldman believes the company is well-positioned to deliver stable and defensive earnings with modest organic growth. It expects this to support the payment of fully franked dividends of 36 cents per share in FY 2025 and then 39 cents per share in FY 2026. At the current share price of $4.95, this implies dividend yields of 7.3% and 7.9%, respectively.
This means that a $10,000 investment in this ASX share could generate passive income of approximately $730 in 2025 and then $790 in 2026.
Smartgroup Corporation Ltd (ASX: SIQ)
Another ASX share that is tipped to provide investors with a big dividend yield and a great source of passive income is Smartgroup Corporation.
It is an industry-leading provider of employee benefits, end-to-end fleet management and software solutions with over 400,000 salary packages and 64,000 novated leases under management.
Bell Potter is positive on the company. Its analysts note that "SIQ looks well priced given a forward P/E of ~14.5x, a defensive client base, earnings tailwinds from the Electric Car Discount Bill (exempts low or zero emission vehicles from Fringe Benefits Tax), an ROE of ~30% and a strong balance sheet."
The broker expects this to allow Smartgroup to pay investors fully franked dividends of 59.7 cents per share in FY 2025 and then 62.7 cents per share in FY 2026. Based on the current Smartgroup share price of $7.76, this equates to fully franked dividend yields of 7.7% and 8.1%, respectively.
This means that a $10,000 investment in this ASX share would pull in approximately $770 of passive income in 2025 and then approximately $810 in 2026.
