ASX dividend stocks look increasingly attractive to me because of how the Reserve Bank of Australia (RBA) has reduced the cash rate multiple times in 2025.
The cash rate is now 3.6%, down from 4.35% at the start of the year. This means investors don't need as big a dividend yield to match/beat the RBA cash rate.
The two businesses I'm about to talk about both have significantly higher yields than 3.6%. I think there's excellent potential for both capital growth and larger payouts in the coming years.
If I had $10,000 to invest in ASX dividend stocks, the two below would be among the names at the top of my list.
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Rural Funds Group (ASX: RFF)
Commercial properties can be an excellent investment for income seekers because of their solid yields and ability to grow operating earnings due to contracted rental increases.
Rural Funds is a real estate investment trust (REIT) that owns a variety of farms across Australia. Those farms include cattle, almond, vineyard, and macadamia properties. I like the diversification because it lowers the risk of being overinvested in one area and gives the business a wider 'universe' to search for the best opportunities.
The ASX dividend stock is seeing organic rental income growth from its contracts, which have fixed annual or inflation-linked increases built in. I expect this will be a key factor that helps drive the distribution higher in the coming years.
At the time of writing, its guided FY26 payout translates into a forward distribution yield of 6.2%.
I also believe the RBA rate cuts will help lower the REIT's interest costs and help close the discount of close to 40% between the adjusted net asset value (NAV) and the Rural Funds unit price.
Bailador Technology Investments Ltd (ASX: BTI)
To me, Bailador is a significantly underrated ASX dividend stock.
It invests in small, private technology businesses with significant growth potential, thanks to their long growth runways and pleasing profit margins.
While all of the companies it has invested in are technology/software related, it does have a diversified portfolio across accommodation, wealth management, digital healthcare, travel and experiences, volunteer management, property investment, fitness studio management and more.
I believe Bailador has regularly shown how its investments are conservatively valued on its balance sheet. A few of its holdings have been taken over in recent years at significantly higher prices. But, even if it isn't undervalued, let's look at what Bailador's portfolio value was last reported at.
In the August 2025 update, Bailador said it had net tangible assets (NTA) of $1.97 pre-tax and $1.77 post-tax. That means, at the time of writing, it's currently trading at a 40% discount to the pre-tax NTA and a 33% discount to the post-tax NTA. The ASX dividend stock looks to me like a very appealing bargain.
The large asset discount has a significant and pleasing effect on the dividend yield on offer.
It aims for a 4% dividend yield on the pre-tax NTA. However, due to the huge discount, the yield is now 6.6%. With franking credits included, the grossed-up dividend yield is 9.4% at the time of writing.
This ASX dividend stock seems like an excellent investment to me.
