S&P/ASX 200 Index (ASX: XJO) shares can be great candidates for providing passive income for investors. When businesses have a generous dividend payout ratio, it can unlock a pleasing dividend yield.
I'm going to look at two businesses which have pleasingly high dividend yields and could continue growing it for investors.
It's pleasing to have a mixture of a good starting yield and further passive income growth in the years ahead, if the outlook is promising.
Let's look at the two businesses.
Chorus Ltd (ASX: CNU)
Fund manager L1 Capital calls Chorus a high-speed fibre broadband infrastructure owner in New Zealand.
L1 says that Chorus is one of the very few regulated digital infrastructure assets remaining in public ownership.
One of the more appealing elements of the ASX 200 share is that it's shifting from being a network builder to a network operator, which means the business is coming to an inflection point for both its cash flow generation and what dividends it can pay to the business.
The fund manager notes the company has guided an annual dividend per share of NZ 57.5 cents in FY25. This translates into a forward dividend yield of 6.8%. In FY26, L1 expects the business could increase the dividend per share to 60 cents in FY26, representing a dividend yield of 7.1%.
That level of a dividend yield from a defensive business could be very appealing.
Centuria Industrial REIT (ASX: CIP)
This is a real estate investment trust (REIT) that's focused on owning industrial properties around Australia and leasing them to high-quality tenants.
Industrial properties are in demand because of a number of different growth trends including a growing population, increasing online shopping adoption, refrigerated space for food and medicine, data centres and so on.
This level of demand is helping drive the ASX 200 share's underlying rental profit potential of the properties. In the FY25 half-year result, the business reported 6.4% like-for-like net operating income (NOI) growth, which is a strong growth rate, in my opinion. This helps the REIT fund larger distribution payments.
It's regularly working on development projects worth tens of millions of dollars, which can unlock further rental income generation for the business.
The business is expecting to pay an annual distribution per unit of 16.3 cents in FY25. This translates into a forward distribution yield of 5.1%, and there's good potential for future growth.
