Owning ASX dividend shares is one of the most rewarding things about investing in the stock market. However, Commonwealth Bank of Australia (ASX: CBA) shares aren't particularly appealing to me for passive income right now.
It's great being able to receive cash flow into bank accounts from our ownership of compelling businesses. I think it's important to focus on businesses that are at valuations that make sense and to aim for investments that can grow in value.
CBA is not exactly firing on all cylinders right now. The lending industry is competitive, with this being an impact on both loan growth rates and the margins lenders can achieve.
In the first quarter of FY26, the bank reported cash net profit after tax (NPAT) of $2.6 billion, representing just 2% year-over-year growth. That's not a compelling growth rate, nor is the current grossed-up dividend yield of 4.5%, including franking credits, particularly exciting.
There are quite a few ASX dividend shares I'd rather buy for passive income at the current valuations than CBA shares.
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Centuria Capital Group (ASX: CNI)
This business is a fund manager that's focused on managing commercial properties. While it may be best known for its office and industrial buildings, it's also involved in areas like real estate finance, healthcare and agriculture.
I like the diversification of the business and how it's benefiting from recent interest rate cuts, which is reducing the cost of debt as well as providing a tailwind for the company's earnings through higher property valuations – this is boosting its ability to generate management fees.
In terms of passive income, the business paid an annual distribution per security of 10.4 cents in FY25, meaning it currently has a distribution yield of 4.9%.
The business is expecting to grow its operating earnings per security (OEPS) by 10% in FY26, which is a much stronger growth rate than what I'm expecting in FY26 from CBA.
I think this ASX dividend share is likely to deliver a stronger total shareholder return than CBA shares over the next three to five years. If the business continues making compelling property acquisitions, then it could be a pleasing market-beater, in my view.
WCM Quality Global Growth Fund (ASX: WCMQ)
Commonwealth Bank is heavily concentrated on the Australian (and New Zealand) economy. Why not look at investments that help provide global earnings diversification?
This exchange-traded fund (ETF) aims to invest in a portfolio of between 20 to 40 stocks that are quality global companies, primarily in the high-growth areas of consumer, technology and healthcare sectors.
The fund targets an annualised dividend yield of 5% for investors, which is a stronger yield than what CBA shares currently provide.
WCM looks for businesses that have expanding competitive advantages/economic moats and wants to see the businesses have a corporate culture that support the expansion of the economic moat.
The strength and performance of these underlying businesses have allowed the WCMQ ETF to deliver an average return per year of 15.9% over the last five years. That implies good growth of the ETF's net asset value (NAV), allowing for a growing distribution from the ASX dividend share.
Of course, past performance is not a guarantee of future investment performance. But, with a global share market to hunt for ideas, the future looks promising. Its three largest holdings are currently AppLovin, Taiwan Semiconductor and Amazon.
