2 ASX blue-chip shares offering big dividend yields

These two investments offer blue-chip exposure and big yields.

| 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

ASX blue-chip shares can be some of the safest and most reliable investments on the ASX thanks to their market position, brand power and scale.

The businesses I'm going to talk about can provide the stability that investors are after.

I'm also expecting both of the following ASX blue-chip shares to provide investors with good passive income in FY26 and beyond.

Man presses green buy button and red sell button on a graph.

Image source: Getty Images

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment company (LIC) that targets large businesses to generate investment returns for the portfolio. It aims to actively invest in the highest-quality Australian companies.

So, instead of just being one ASX blue-chip share, it owns a portfolio of shares.

Some of the businesses that it owns a larger position in compared to the ASX share market's position sizing include Rio Tinto Ltd (ASX: RIO), Fortescue Ltd (ASX: FMG), Alcoa Corporation (ASX: AAI), James Hardie Industries plc (ASX: JHX) and Medibank Private Ltd (ASX: MPL).

As a company, the board of directors can declare the size of the dividend they want to pay, as long as there is a profit reserve to support the payout. WAM Leaders' portfolio has delivered an average return of 12.1% per year since inception in May 2016 (before fees, expenses and taxes), outperforming its ASX share benchmark by close to an average of 3% per year, which is an impressive record, in my view.

At 31 December 2025, the LIC had built up its profit reserve to 27.4 cents per share, which is enough to pay a dividend close to three years at the size of the FY25 payout. It has increased its annual dividend every year between FY17 and FY25, which is a pleasing record of consistency.

Its FY25 annual dividend translates into a grossed-up dividend yield of approximately 10%, including franking credits. I'm optimistic about slight dividend increases in the coming years.

Transurban Group (ASX: TCL)

Transurban is one of the largest toll road businesses in the world, with roads in Sydney, Melbourne, Brisbane and North America.

Growing populations in cities are a good tailwind for Transurban's ASX blue-chip share, increasing average daily traffic (ADT) on its roads. In the first quarter of FY26, group ADT rose 2.7% year-over-year, with Sydney ADT up 1.7%, Melbourne ADT up 3.2% year-over-year, Brisbane ADT up 2.6% and North America ADT up 6.8%.

Additionally, the business occasionally completes a new road (such as WestConnex or the West Gate Tunnel project) that can increase its potential to serve traffic and increase the volume of tolls.

The business is also benefiting from rising tolls over time, which is a promising outlook for revenue and earnings growth. The ASX blue-chip share is planning to increase its distribution per security by 6% in FY26 to 69 cents. That translates into a forward distribution yield of approximately 5%.

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 positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group. 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

A woman standing on the street looks through binoculars.
Blue Chip Shares

1 ASX 200 share I'd buy while the market is distracted

Short-term uncertainty may weigh on sentiment, but the long-term value of this digital marketplace still looks attractive.

Read more »

Woman using a pen on a digital stock market chart in an office.
Blue Chip Shares

3 ASX 200 shares I'd buy and hold through any market cycle

Market cycles are impossible to avoid, so I would focus on businesses with strong positions and reasons to keep delivering…

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Blue Chip Shares

CSL shares vs CBA shares: Which is the better buy?

The safer choice may not be the one with the most upside. That is why this comparison is tricky.

Read more »

Young woman using computer laptop smiling in love showing heart symbol and shape with hands. as she switches from a big telco to Aussie Broadband which is capturing more market share
Blue Chip Shares

I'd buy these blue-chip ASX shares with $2,000 in a heartbeat

With $2,000 to invest, I would focus on quality businesses that can keep growing rather than chasing short-term excitement.

Read more »

Wlorker on a laptop on top of solar panels.
Blue Chip Shares

3 ASX mining stocks positioned to benefit from the green transition

These three ASX mining shares are branching into resources required for the green transition. This is why it could be…

Read more »

A woman reclines in a comfortable chair while she donates blood holding a pumping toy in one hand and giving the thumbs up in the other as she is attached to a medical machine to collect her blood donation.
Blue Chip Shares

Why CSL shares could be one of the best buys on the ASX right now

CSL shares have been hammered by earnings disappointments. But the long-term investment case remains strong.

Read more »

A happy elderly couple enjoy a cuppa outdoors as the woman looks through binoculars.
Blue Chip Shares

The ageing Australia megatrend: 3 ASX shares built to benefit

With an ageing population, Australian companies must position themselves to provide services made for this demographic. These three stocks have…

Read more »

Workers inspecting a gas pipeline.
Dividend Investing

This overlooked ASX stock has raised its dividend 20 years in a row

20 years of consistent dividend growth is just the tip of the iceberg for this quality business.

Read more »