ASX blue-chip shares can be a strong choice for investors wanting good dividend yields from their portfolios.
Large companies have grown to a size where they can reward investors with substantial dividend payments while still maintaining a significant budget for investing in the growth and upkeep of their business.
The two ASX blue-chip shares I'm going to highlight are among the leaders in Australia at what they do. They're investing for the future while also having good dividend yields.
Telstra Group Ltd (ASX: TLS)
Telstra is the leading telecommunications business in Australia, with the most subscribers, the widest network coverage, and the best spectrum assets.
The business has been steadily increasing its dividend annually over the last few years, and it looks set to continue that record thanks to net profit growth, ongoing subscriber growth, and price increases for mobile users.
In the FY25 half-year result, Telstra reported earnings per share (EPS) growth of 6% and dividend per share growth of 5.6%.
The forecast on Commsec suggests the ASX blue-chip share could pay an annual dividend per share of 19 cents in FY25, which translates into a grossed-up dividend yield of 5.5%, including franking credits.
But it could get even better for shareholders in FY26 because the Commsec forecast suggests a potential dividend of 20 cents (a year-over-year increase of 5.25%), which works out to be a grossed-up dividend yield of 5.8%, including franking credits.
I think the importance of an internet connection (through a wireless network) could grow in the coming years, meaning Telstra's services could become increasingly useful and valuable.
Coles Group Ltd (ASX: COL)
Coles is one of the largest supermarket businesses in Australia. It also operates several liquor businesses, including Coles Liquor, First Choice Liquor Market, Liquorland, and Vintage Cellars.
We all need to eat, so I'd say that Coles could be one of the most defensive businesses on the ASX. This has helped profit and dividend growth in recent times.
Pleasingly, the company has grown its annual dividend every year over the past five years, and not many other ASX blue-chip shares can say that.
The forecast on Commsec suggests the ASX blue-chip share could pay an annual dividend per share of 75.6 cents in FY26. That would translate into a grossed-up dividend yield of 5.3%, including franking credits.
The prediction on Commsec then suggests the company could increase its annual dividend by 11% to 84 cents per share. This would translate into a grossed-up dividend yield of 5.9%, including franking credits.
