3 little-known ASX dividend stocks to buy for income

Small businesses can be just as compelling options for passive income.

| More on:
A young boy flexes his big strong muscles at the beach.

Image source: Getty Images

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

  • Small businesses on the ASX, like Rivco Australia, WAM Microcap, and Rural Funds Group, offer appealing and resilient dividend yields comparable to larger entities.
  • Rivco Australia generates income through water entitlements, boasting a 7.1% grossed-up yield, while WAM Microcap, an investment company, provides a 9.5% grossed-up yield from strategic investments in small companies.
  • Rural Funds Group, a real estate investment trust, offers a forward distribution yield of 6% with a positive outlook for increased rental income in the coming years.

Small businesses can be just as appealing as a big business for dividends. That's why good ASX dividend stocks can just as easily be ASX blue-chip shares as little-known stocks.

A dividend yield is decided by the dividend payment compared to the share price. A 5% dividend yield can come from any sized business.

The three businesses I'm going to talk about are relatively small but can offer large and resilient dividend payouts.

Rivco Australia Ltd (ASX: RIV)

Rivco Australia, previously known as Duxton Water, owns a portfolio of water entitlements. These entitlements are vital for the Australian agricultural sector, enabling Rivco to generate lease income on either short or long-term contracts. Over time, the company can benefit from a rise in the value of water entitlements, which may also herald an increase in the potential lease income for the ASX dividend stock.

This business is fairly small on the ASX, with a market capitalisation of $228 million at the time of writing, according to the ASX.

Impressively, the business has increased its annual dividend per share every six months for the last several years. Its latest two payments come to a grossed-up dividend yield of 7.1%, including franking credits.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is a listed investment company (LIC) focused on investing in the smallest and most exciting companies which could deliver good investment returns.

The investment strategy has clearly worked well because at 31 October 2025, the LIC had delivered an average return per year of 17.6%, before fees, expenses and taxes since inception.

That level of investment return, which is not guaranteed to continue, has enabled the ASX dividend stock to deliver large and growing dividends over its lifetime.

In FY25, it paid shareholders a total annual dividend of 10.6 cents per share, translating into a grossed-up dividend yield of 9.5%, including franking credits.

WAM Microcap has a market capitalisation of $451 million according to the ASX, at the time of writing.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that helps give Australians exposure to different sectors of the farming world, such as almonds, cattle, macadamias, vineyards and cropping.

The ASX dividend stock has increased its distribution in a majority of the years of the last decade, with no cuts. It's expecting to maintain its distribution at 11.73 cents per unit in FY26, translating into a forward distribution yield of 6%.

According to the ASX, at the time of writing, Rural Funds has a market capitalisation of $766 million.

With the RBA cash rate lower at the end of this year than the start, I believe the outlook for real estate investments is solid, particularly with Rural Funds' expectations of larger rental income in the coming years.

Motley Fool contributor Tristan Harrison has positions in Rivco Australia, Rural Funds Group, and Wam Microcap. 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 Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Happy man working on his laptop.
Dividend Investing

2 of the best ASX dividend shares to buy in December

Let's see why these shares could be best buys according to the broker.

Read more »

Close-up of a business man's hand stacking gold coins into piles on a desktop.
Dividend Investing

This ASX dividend share is projected to pay an 8% yield by 2027

This business has the potential to deliver to a lot of income…

Read more »

A golden egg with dividend cash flying out of it
Dividend Investing

The 8% dividend stock that pays cash every month

An 8% yield paid out monthly is a tempting prospect.

Read more »

Coal Miner in the tunnels pushing a cart with tools
Dividend Investing

ASX 200 mining stock down 20% with 8% yield: is it a buy?

This ASX share could reward investors generously, and not just in dividends.

Read more »

Smiling couple sitting on a couch with laptops fist pump each other.
Dividend Investing

Where to invest $20,000 in ASX dividend shares

These dividend shares could be top picks for income investors this month.

Read more »

A young man sits at his desk reading a piece of paper with a laptop open.
Dividend Investing

1 ASX dividend stock down 24% I'd buy right now

This business is down significantly and it could offer pleasing payouts.

Read more »

A padlock wrapped around a wad of Australian $20 and $50 notes, indicating money locked up.
Dividend Investing

An ASX dividend stalwart every Australian should consider buying

This business has numerous positives, making it a buy.

Read more »

a large pile of cash made up of bundled $100 notes is piled against a plain background.
Dividend Investing

Investors can target $1,240 a year in dividend income from $20,000 in this ultra-high-yielding ASX 200 gem – here's how

This business can provide significant passive income.

Read more »