Little-known ASX dividend shares can be pleasing picks for diversification, offering something very different to what other ASX blue-chip shares typically provide.
A business can make a profit in a whole manner of different ways and that can be translated into passive income dollars in just the same way.
I own two of these businesses in my portfolio and I'm optimistic their dividends can continue to be pleasing in the coming years.
Rivco Australia Ltd (ASX: RIV)
Rivco Australia (previously known as Duxton Water) owns a portfolio of water entitlements, which can then be leased to irrigators on short-term or long-term contracts. The company can benefit from both the lease income and the potential increase in value of water entitlements.
Impressively, the little-known ASX dividend share has increased its half-yearly dividend every year since 2017, which is a longer dividend growth streak than most ASX blue-chip share.
The last two dividends translate into grossed-up dividend yield of around 7%, including franking credits, at the time of writing. I'm expecting further dividend growth for the foreseeable future, particularly if water entitlement prices increase.
WAM Microcap Ltd (ASX: WMI)
WAM Microcap is a listed investment company (LIC) that invests in small businesses with strong growth potential.
A fund manager can make investment returns from small shares or big shares. Arguably, it's easier to make larger returns from smaller stocks because they are earlier on in their growth journeys and they are less followed investments (so the price/earnings (P/E) ratio is lower than it could be).
The WAM Microcap portfolio returned an average of 17.3% per year between June 2017 and September 2025, before fees, taxes and expenses.
This strong return has funded large and rising dividends. Its FY25 dividends per share translate into a grossed-up dividend yield of around 9%, including franking credits, at the time of writing.
Service Stream Ltd (ASX: SSM)
This little-known ASX dividend share describes itself as a provider of essential network services, operating across all states and territories.
It works across a number of industries including power grids, the industrial and resources sector, telecommunications, gas, potable water and wastewater, defence, health, renewable, new energy, maritime, social housing, rail, roads and more.
Service Stream delivered a strong FY25, with revenue growth of 1.2%, operating profit (EBITDA) from operations growth of 13.1% and underlying net profit (NPAT-A) growth of 36.7%.
The growth helped them fund an annual dividend per share of 5.5 cents, which represented a year-over-year increase of 22.2%.
At the time of writing, that translates into a grossed-up dividend yield of 3.5%, including franking credits.
The company is expecting to achieve further growth in FY26, with an improvement in the quality of earnings across utility operations and strong levels of infrastructure investment. I think this bodes well for further dividend growth.
