I believe a certain group of ASX dividend stocks could be great investments for a combination of passive income and potential capital growth.
In an era when the Reserve Bank of Australia (RBA) is cutting the cash rate, I believe that attractive ASX dividend shares could become increasingly appealing to investors, sending their share prices higher.
But, currently, these businesses offer dividend yields that look too good to ignore. That's why I want to highlight the following businesses. If I had $5,000 to invest in ASX dividend stocks, I'd happily spread it across the below three names.
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Rural Funds Group (ASX: RFF)
Rural Funds Group is a real estate investment trust (REIT) that's invested in various farm types including cattle, vineyards, macadamias, and almonds.
The ASX dividend stock remains heavily undervalued compared to its stated adjusted net asset value (NAV) of $3.10 as of 31 December 2024. That means it's trading at a discount of around 40% at the time of writing.
This large discount means it's generating a lot of rental profit and paying a large distribution yield for its valuation. It's expecting to pay a distribution of 11.73 cents per unit in FY26, translating into a forward distribution yield of approximately 6%.
I'm expecting the distribution to grow in future years thanks to steadily rising rental income at its farms and hopefully lower interest costs. With the RBA reducing the cash rate, I think it's likely the discount between the Rural Funds unit price and its adjusted NAV could reduce in the medium term.
Centuria Industrial REIT (ASX: CIP)
This is another REIT and it's focused on owning industrial properties across Australia.
I think this is a great area to be invested in because of the very low vacancy rate in the country and the solid demand for industrial properties thanks to e-commerce growth, more data centres, and more refrigerated space for food and medicines.
This is helping drive the ASX dividend stock's rental income higher as well as the distribution. In FY26, it's expecting to grow its rental profit (funds from operations – FFO) by 6% to between 18 cents and 18.5 cents per security, and grow the distribution by 3% to 16.8 cents per security.
Based on the guidance, it could pay a distribution yield of approximately 5%.
I think it looks good value because, at the time of writing, it's priced at a 15% discount to the net tangible assets (NTA) per unit of $3.92 as of 30 June 2025.
Bailador Technology Investments Ltd (ASX: BTI)
This is an investment company that tries to find the most compelling, small, technology businesses with strong growth potential.
There are a number of attributes the businesses need to have to be attractive to Bailador, including proven revenue generation and management capability, demonstrated business models, and expansion opportunities. Bailador focuses on software, internet, mobile, data, and online marketplaces.
Some of the ASX dividend stock's current investments include Siteminder Ltd (ASX: SDR), DASH, Updoc, Rosterfy, PropHero, Hapana, Access Telehealth, and Expedition Software. Collectively, these businesses are growing revenue at a fast pace and will help drive Bailador's underlying value.
It aims to pay a fully franked dividend yield of 4% of its pre-tax NTA, which translates into a grossed-up dividend yield of 5.7%, including franking credits. But, due to the fact it's trading at such a large discount to its pre-tax NTA (of around 35%, at the time of writing), it means the grossed-up dividend yield, including franking credits, is well over 8%.
I'm optimistic about the returns the business could produce in the coming years as the tech companies deliver on their growth potential. I believe interest rate reductions are likely to help reduce the discount between the NTA and the Bailador share price.
