Dividend investors should put these 2 top ASX shares on their watchlist

I think these stocks are among the best on the ASX for income.

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Key points

  • ASX shares Charter Hall Long WALE REIT and Duxton Water Ltd are promising long-term dividend investment opportunities amid recent RBA cash rate cuts.
  • Charter Hall Long WALE REIT benefits from a diversified property portfolio with a high weighted average lease expiry, offering rental visibility, security, and anticipated distribution growth.
  • Duxton Water Ltd, noted for its permanent water entitlements, has consistently increased dividends and reported a 13.2% post-tax NAV annual return in August.

Following multiple RBA cash rate cuts this year, there are a few ASX shares that stand as clear long-term opportunities for dividend investors.

I like businesses where it's clear how they are going to grow earnings because profit is what funds ongoing payments and can enable larger payouts to shareholders.

Dividend growth isn't guaranteed of course, but in a world where there's inflation and uncertainty, it's appealing to have an understanding of the outlook. Let's take a look at two of the businesses I'd put on an income watchlist and buy today.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that owns various types of commercial property in its portfolio.

One of the compelling aspects of this business is that it has a high weighted average lease expiry (WALE). In other words, if you look across the various properties and rental contracts, the average expiry was 9.3 years away as of 30 June 2025. That gives investors a significant degree of rental visibility and security.

There are a wide range of quality tenants leasing the properties including Endeavour Group Ltd (ASX: EDV), various state and federal government entities, Telstra Group Ltd (ASX: TLS), BP, Coles Group Ltd (ASX: COL), Metcash Ltd (ASX: MTS), David Jones, Arnott's Group, Bunnings and Westpac Banking Corp (ASX: WBC). I like the wide diversification of the property portfolio.

The ASX share has built in organic growth for its rental profit, thanks to annual increases which are either fixed or linked to inflation. This is a useful tailwind that can help support higher earnings and payouts in the coming years.

It's expecting to grow its FY26 distribution per security by 2% to 25.5 cents, which translates into a forward distribution yield of approximately 5.5%, at the time of writing.

Duxton Water Ltd (ASX: D2O)

Duxton Water is another ASX share that I think is underrated as an option for dividend investors.

The business owns a portfolio of permanent water entitlements which allows it to offer long-term entitlement leases, forward allocation contracts and spot allocation supply to Australian irrigators. It may soon change its name to Rivco Australia after the approval of the internalisation of management.

Duxton Water can generate a return for shareholders from both the lease income and long-term growth in the value of the water entitlements.

The ASX share recently announced in its August 2025 monthly update that its net asset value (NAV) increased by 1 cents per share, driven by "strategic trades, additional entitlement allocations and improved allocation prices." In the last 12 months, its post-tax NAV  delivered a return of 13.2%.

While July rainfall temporarily reduced prices at the start of August, the return of average-to-drier conditions across the southern Murray-Darling Basin supported a rebound, according to Duxton Water. Allocation prices ended winter 2025 at their highest seasonal levels since 2019.

The business has increased its half-yearly dividend every six months since November 2017. Not many ASX shares have a consistent dividend growth streak spanning eight years. At the time of writing, its latest two dividends equate to a grossed-up dividend yield of approximately 7%, including franking credits.

Motley Fool contributor Tristan Harrison has positions in Duxton Water. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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