ASX blue-chip shares are among the best options for reliable passive income. Resilient products support consistent dividend payments and attractive dividend yields.
Businesses with a strong market share, cost advantages, larger margins, and a good outlook can be very appealing investments. Rising profits can lead to capital growth over time and, typically, dividend growth too.
With their current dividend yields and appealing prospects for further growth, I'm optimistic about what the following two businesses can accomplish.
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Medibank Private Ltd (ASX: MPL)
Medibank is the largest private health insurer in Australia, and it's steadily growing its exposure to other healthcare businesses.
The ASX blue-chip share is delivering exactly the growth I'd want to see if I were a shareholder.
In the FY26 half-year results, the business reported adding 38,300 net resident policyholders and 1,500 net non-resident policy units. These are key metrics which maintain/grow its market share, add to scale advantages, and hopefully deliver rising profit margins over time.
HY26 revenue climbed by 5.5%, group operating profit increased by 6% to $360.1 million, and the interim dividend per share was increased by 6.4% to 8.3 cents per share.
I view healthcare as a defensive sector, and health insurance is an effective way to invest across a broad range of healthcare areas, including the growing demand for services amid Australia's ageing population.
I'm expecting dividend growth to continue for the foreseeable future. Its latest two declared dividends come to a grossed-up dividend yield of 6.4%, including franking credits. That's a great starting point for income, in my view.
Telstra Group Ltd (ASX: TLS)
Telstra is a leading ASX telecommunications share that has built an impressive 5G network, helping it stay ahead of competitors.
Its excellent mobile division is key for delivering long-term growth, and there was good news across the board in the FY26 half-year result. The average revenue per user (ARPU) rose by 5.1% year over year, and mobile handheld users increased by 135,000, with growth across postpaid handheld, prepaid handheld, and wholesale users.
These growth figures allowed the business to deliver net profit growth of 9.4% to $10.5 billion. This saw earnings per share (EPS) grow by 11.2% and the dividend per share increase by 10.5% to 10.5 cents. Cash EPS increased by 19.7% to 14 cents.
It seems to me like the ASX blue-chip share is very effectively balancing investing for growth, delivering net profit growth, and rewarding shareholders.
If I assume that Telstra will repeat the same dividend in another six months, it would have a grossed-up dividend yield of approximately 5.8% for FY26, including franking credits, at the time of writing.
As Australia becomes increasingly digital, I believe Telstra will benefit from that tailwind and continue winning new subscribers. I'm also optimistic that the business can continue growing its wireless broadband subscriber count, providing 5G-powered broadband, which means capturing the margin that the NBN is currently taking.
