Receiving dividends is one of the best reasons for owning ASX blue-chip shares. Gaining cash is rewarding, while the franking credits can be a pleasing boost for the after-tax dividend yield.
ASX blue-chip shares tend to be mature businesses,. Because they don't have many places to invest, they have less reason to retain cash, which can lead to a pleasing dividend yield for shareholders.
Both of the blue chips below have pleasing dividend records, and I expect them to continue to pay out pleasing dividends for the foreseeable future.
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Medibank Private Ltd (ASX: MPL)
Medibank is Australia's largest private health insurer with its Medibank and ahm brands.
Healthcare is a defensive sector, and I appreciate how investing in this private health insurer gives exposure to various areas of the industry, rather than a company focused on one specific device or drug.
Turning to the income, aside from 2020, the company has increased its annual dividend per share every year since 2015, when it first started paying a dividend.
In FY25, it hiked its annual dividend per share by 8.4% to 18 cents, which translates into a grossed-up dividend yield of 5.3%, including franking credits.
A key driver of the earnings, which pays for dividends, is policyholder growth. In FY25, net resident policyholder growth was 1.4% and net non-resident policy unit growth was 3.1%. This helped drive health insurance operating profit higher by 7.1% and underlying earnings per share (EPS) up by 8.5%.
In FY26, the ASX blue-chip share is expecting volume growth in the Medibank brand and to maintain solid gross profit growth with its non-resident health insurance.
Australian Foundation Investment Co Ltd (ASX: AFI)
This business is the largest listed investment company (LIC) in Australia, and it's also one of the oldest. It has been a very stable long-term investment for investors.
Commonly known as AFIC, it invests in a portfolio of ASX blue-chip shares for shareholders to try to generate capital growth and cash flow from dividends.
It's invested in ASX blue-chip share names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Goodman Group (ASX: GMG), Transurban Group (ASX: TCL), and Telstra Group Ltd (ASX: TLS).
AFIC has provided investors with an incredibly stable (ordinary) dividend this century, and I expect that record to continue. In FY25, the company slightly increased its annual dividend per share to 26.5 cents and declared a special dividend of 5 cents per share.
Using the latest annual ordinary dividend, AFIC's grossed-up dividend yield is just over 5%, including franking credits.
At the time of writing, it's trading at a discount of more than 10% to its pre-tax net tangible assets (NTA) on 19 September 2025. That's one of the largest discounts of the past decade.
