Charter Hall Long WALE REIT (ASX: CLW) is an ASX dividend stalwart that every passive income investor should consider, in my view.
I believe it offers virtually everything a dividend-focused investor could want: a good yield, stability, diversification, good value and the potential for a bit of growth.
Let's run through each of those positives.
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Diversification
As its name suggests, the business is a real estate investment trust (REIT). It's perhaps the most diversified REIT that's listed on the ASX.
The ASX dividend stalwart is invested across numerous sectors including government properties (including Geoscience Australia), pubs, grocery and distribution, data centres, telecommunication exchanges, Bunnings properties, service stations, food manufacturing, waste and recycling, and more.
I like this strategy because this reduces the risk of being too overexposed to one particular sector. Plus, it means the REIT can look across the entire property landscape for opportunities.
Stability
I think of the most important aspects of being an ASX dividend stalwart is that it can provide stability for investors during economic uncertainty.
Charter Hall Long WALE REIT offers stability in a few different ways.
Firstly, as the name suggests, it has a long WALE. That's not a giant sea creature, but the weighted average lease expiry. In other words, how long are its rental contracts for (and including the fact that some rental contracts generate more rental income than others).
Currently, it has a WALE of around nine years, which is one of the largest in the industry.
The business also has a portfolio occupancy of near 100%, with 99% leased to tenants that are either government, or leading ASX-listed, multinational or national businesses.
Some of the ASX tenants include Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Endeavour Group Ltd (ASX: EDV).
A good yield
The ASX dividend stalwart pays out a distribution every three months, which is pleasingly regular for investors wanting passive income.
It's expecting to pay an annual distribution per unit of 25.5 cents in the 2026 financial year, which represents a distribution yield of 7.3%. It hasn't offered a distribution yield better than during most of the last six years.
Growth potential of the ASX dividend stalwart
I like saving cash in a bank account, but I'm not looking for a term deposit-style investment that offers fixed income and no growth.
Instead, I want to own things that can deliver earnings growth and distribution growth in the long-term, even if there's a bit of disruption in the short-term.
Charter Hall Long WALE expects to grow its FY26 annual distribution by 2% to 25.5 cents amid the interest rate volatility.
I think longer-term growth looks likely thanks to rental growth – there are some properties with fixed annual increases and others with rental growth linked to inflation.
Overall, I think this business looks undervalued considering its latest stated net tangible assets (NTA) was $4.68 – much higher than the current unit price.
