This could be the right time to examine high-yield ASX dividend shares, given that central banks are reducing their official cash/interest rates.
For every rate cut, it makes the higher yield of these ASX dividend shares more appealing to me compared to an interest-rate-sensitive option like a bond, savings account, or term deposit.
I'm going to talk about two businesses that I'm expecting to see dividend increases in FY26 and beyond, whilst also providing a high yield.
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Charter Hall Long WALE REIT (ASX: CLW)
This is one of the most appealing real estate investment trusts (REITs) around, in my opinion.
Firstly, it targets a 100% distribution payout ratio of its operating (rental) profit, which unlocks a very pleasing distribution yield for investors.
In FY26, it's expecting to grow its distribution per security to 25.5 cents, up from 25 cents per security in FY25. At the time of writing, the ASX dividend share could pay a high yield of 5.6%.
In my view, the business doesn't need to withhold distributing any rental profit to see earnings grow in the near term due to the lowering of interest rates (reducing interest costs) and the rental growth that's built into all of its (long-term) rental contracts. Some rent grows by a fixed amount each year, while other contracts' revenue is linked to inflation. The organic rental income growth can help push up the rental profits and distributions for the foreseeable future.
Telstra Group Ltd (ASX: TLS)
Telstra is the clear telco leader in Australia, with the most subscribers, the widest network coverage, and the most valuable spectrum assets. I think the network strength is a key reason why the company has such a large customer base and is also attractive for other businesses using the Telstra network to provide phone plans to customers such as Boost Mobile and ALDI Mobile.
The more users that are on Telstra's network, the more the fixed costs are spread. This leads to greater operating leverage for Telstra, leading to rising profit margins.
FY25 saw total underlying income rise 0.7% to $23.6 billion, underlying operating profit (EBITDA) climb 4.6% to $8.6 billion, underlying earnings per share (EPS) grow 3.2% to 19.1 cents, and the dividend per share rise 5.6% to 19 cents.
At the time of writing, the FY25 payout translates into a grossed-up dividend yield of 5.6%, including franking credits. I think that's a good starting point for a high-yield ASX dividend share.
I think Telstra could pay an annual dividend per share of approximately 20 cents in FY26, which would translate into a grossed-up dividend yield of close to 6%, including franking credits.
As long as Telstra continues to invest in its network, then I think it can continue to win more subscribers and grow profit. I also like that the business has defensive earnings.
