The ASX is a great place to find ASX dividend share investments that offer dividend yields that are stronger than what we can get from a term deposit or savings account.
The Reserve Bank of Australia (RBA) cash rate currently appears to be in a rate-cutting phase as the war on inflation seems mostly complete, though not totally finished, with the danger of US tariffs shaking up the current economic dynamic still lingering.
While the highest-yielding stocks may not always be a great choice for income investors – sometimes dividends are cut – there are a few high-yielding names that I believe look very appealing, such as the two below.
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Rural Funds Group (ASX: RFF)
Rural Funds is one of the most compelling businesses for income because of how consistent it has been at paying a reliable distribution despite the headwind of higher interest rates over the last few years.
This real estate investment trust (REIT) owns a portfolio of farms across Australia, including cattle farms, vineyards, almond farms and macadamia farms.
I like that Rural Funds is able to look across various farming sectors for opportunities because it opens up more avenues to find the best investments and reduces the risk of being too exposed to one particular type of farm.
Farming can be a cyclical industry, but the ASX dividend share largely doesn't take on operational risks. Thankfully, that's mostly down to the tenants.
Those farms are regularly increasing their rental income because most farming contracts have rental indexation built in, either with fixed annual increases or rental hikes linked to inflation.
With interest rates seemingly on the way down, I'm hopeful the business can return to distribution growth after a few years of maintaining the distribution.
In FY26, it's expecting to pay a distribution of 6.4%.
Duxton Water Ltd (ASX: D2O)
This is another business involved with the agricultural sector. It owns a portfolio of permanent water entitlements and provides a variety of water supply solutions to Australian farmers.
Irrigators can utilise long-term entitlement leases, forward allocation contracts and spot allocation supply.
Impressively, the ASX dividend share has grown its distribution each year since 2017, which I'd describe as one of the best dividend records of a company of the size of Duxton Water.
The business can benefit from both the lease income generated from its entitlements as well as any increase in value of the entitlements over time.
This could be a useful time to invest in Duxton Water shares because according to the business, the last 12 months have been "significantly drier", resulting in increased demand for long-term water security. At 30 June 2025, the major southern Murray-Darling-Basin storages were "at their lowest in five years for this time of the year" which has contributed to a reduced supply of available water.
I think this ASX dividend share is a useful way to diversify an income-focused portfolio. Its trailing grossed-up dividend yield is 6.9%.
