2 ASX blue-chip shares offering big dividend yields

These stocks offer both earnings resilience and large passive income.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Commonwealth Bank and BHP's higher valuations have reduced their yields; consider smaller businesses like Sonic Healthcare and Metcash for rewarding dividends.
  • With operations in several countries, Sonic Healthcare reported strong revenue growth in FY25 and expects significant earnings and payout growth in the coming year.
  • Metcash's resilient food, liquor, and hardware divisions help it maintain a strong dividend yield, with promising sales growth contributing to future dividend prospects.

When you think of ASX blue-chip shares for passive income, names from the ASX bank share and ASX mining share sectors may come to mind. But, there are other stocks that can also provide a very rewarding dividend yield.

Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are highly followed businesses by investors and their price/earnings (P/E) ratios are higher than they used to be, reducing the dividend yield on offer.

The largest businesses also have less growth potential than they used to because they're already huge. Smaller businesses with commendable market positions could be preferable choices for dividends. Let's take a look at two compelling ideas.

Person holding a blue chip.

Image source: Getty Images

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the largest pathology businesses in Australia. It also has a good market presence in countries like Germany, the UK and Switzerland. Plus, it has a small position in markets like New Zealand and Belgium.

People don't choose when to get sick or when they need medical attention. People also place a high importance level on their health, so I'd say this business has defensive earnings.

In FY25, the business delivered 8% revenue growth to $9.6 billion, 7% net profit growth to $514 million and 21% growth of operating cash flow to $1.3 billion. This growth helped the business increase its annual payout per share to $1.07, which translates into a trailing dividend yield of 4.9%, excluding franking credits.  

The ASX blue-chip share is expecting to grow its payout in the coming years with future earnings growth.

Sonic Healthcare suggests its FY26 operating profit (EBITDA) could grow up to 13% year-over-year with "strong" earnings per share (EPS) growth (of up to 19%). Management point to organic growth, Swiss and German synergies, acquisitions and US initiatives as drivers of this guidance.

Metcash Ltd (ASX: MTS)

Metcash is a diversified business thanks its three different divisions – food, liquor and hardware.

I'd describe the food and liquor divisions as resilient, as it distributes food and liquor to hundreds of independent retailers around the country including IGA and other supermarkets, as well as Cellarbrations, IGA Liquor, The Bottle-O, Porters, Thirsty Camel and others.

The food division also has a business called Superior which services restaurants, cafes, canteens, caterers, schools, universities, healthcare and aged care facilities.

The ASX blue-chip share owns a number of businesses in its hardware segment including Mitre 10, Home Hardware, Total Tools, Bianco Construction Supplies and Alpine Truss.

I like how defensive the food and drink side of the business is, while the hardware segment could see a bounce back from tough operating conditions following RBA rate cuts and a resurgence in house prices. That bodes well for the growth of the dividend yield in the future, in my view.

The recent trading update was promising. In the 18 weeks to 31 August 2025, total sales excluding tobacco increased 5.1% (or 1.1% including tobacco). Total food sales were up 8.6% excluding tobacco sales, total liquor sales were up 1.5% and Total Tools and Hardware Group sales were up 1.8%.

The business pays around 70% of its underlying net profit as a dividend, which led to a total dividend per share of 18 cents in FY25. That translates into a trailing grossed-up dividend yield of 6.75%, including franking credits.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 recommended BHP Group and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Blue Chip Shares

Happy work colleagues give each other a fist pump.
Blue Chip Shares

My best blue-chip ASX 200 buys for April

Looking for quality in uncertain markets? These three ASX 200 shares stand out to me.

Read more »

A woman scratches her head, thinking is this a no-brainer?
Healthcare Shares

Does this ASX 200 stock's fall make it a no-brainer buy?

Despite a major transformation, this stock is down more than 20%. Is this an opportunity?

Read more »

A happy woman stands outside a building looking at her phone and smiling widely.
Blue Chip Shares

I think smart investors should buy these ASX 200 blue-chip shares with $10,000

Looking for ideas? Here are three ASX 200 blue chips that could help build long-term wealth.

Read more »

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.
Blue Chip Shares

Would I buy BHP, CBA, and CSL shares today?

These three ASX 200 leaders have taken different paths lately. Here’s how I’d think about them right now.

Read more »

A man looking at his laptop and thinking.
Blue Chip Shares

3 top blue-chip ASX 200 shares that look dirt cheap right now

A buying opportunity could have opened up for patient investors.

Read more »

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Blue Chip Shares

2 fantastic ASX 200 shares to buy and hold for the next five years

Let's see why these shares could be quality picks for patient investors.

Read more »

A man in a suit looks serious while discussing business dealings with a couple as they sit around a computer at a desk in a bank home lending scenario.
Blue Chip Shares

2 ASX shares that could benefit from rising interest rates and oil prices

These two shares may be well-placed in the current environment.

Read more »

A person holds strong behind their umbrella as they weather the oncoming storm.
Blue Chip Shares

2 great ASX 200 blue-chip shares I'd buy right now

This looks like a good time to invest, in my view.

Read more »