Owning BHP Group Ltd (ASX: BHP) shares usually means receiving a good level of passive income and this year looks like it will be the same. It's a blue-chip ASX dividend share.
But, I also note that BHP's share price is up 45% in the past year, as the chart below shows.
I become more cautious about businesses in cyclical industries when their share prices soar because the good times usually don't last forever. A much higher valuation means a lower dividend yield.
At some point in the medium-term, we could see both resource prices reduce and the BHP share price fall. There's no rush in buying ASX resource shares – I expect another shift in the supply and demand cycle to help investors buy at a cheaper price.
Until then, there are a few other ASX dividend shares I'd rather buy.
Image source: Getty Images
Universal Store Holdings Ltd (ASX: UNI)
This company aims to sell to fashion-focused customers through its premium apparel brands, with its principal businesses operating under the Universal Store and Perfect Stranger retail banners.
Discretionary retail may usually be a very cyclical industry, but this ASX dividend share has managed to increase its payout every year since it started paying a dividend in 2021. That's thanks to very pleasing sales and net profit growth over that period, despite the high inflation.
We can't be sure what the near-term holds, but the ASX dividend share's sales growth remains pleasing.
In the first 17 weeks of the second half of FY26, Universal Store banner sales achieved 8.1% like-for-like sales growth, while Perfect Stranger achieved 10% LFL sales growth.
Excitingly, the company is expecting FY26 sales to grow by approximately 11.5%, while underlying operating profit is expected to rise by 15.4%.
According to the forecast on Commsec, the business could pay a grossed-up dividend yield of 8.4% in FY26.
Centuria Industrial REIT (ASX: CIP)
I like this as an alternative to BHP shares because it receives consistent rental earnings due to demand for industrial space.
Positive demand trends like online shopping adoption, data centres, refrigerated space and onshoring of supply chains are helping increase the rental potential of industrial properties.
In the first half of FY26, the business reported a strong level of rental progress – net operating income (NOI) grew by 5.1%. This is a great tailwind for the rental profits and distribution.
According to the REIT, its portfolio is, on average, 20% under-rented. This provides future earnings growth potential as contracts come up for renewal in the future.
The ASX dividend share expects to grow its annual distribution by 3% in FY26 to 16.8 cents, translating into a distribution yield of 5.6%, at the time of writing.
Jesse Curtis, head of funds management at Centuria Capital Group (ASX: CNI), said:
Australia's industrial sector continues to demonstrate strong structural demand momentum, supported by resilient population growth, sustained public infrastructure investment and a rebound in tenant activity. Additionally, national long-term supply remains constrained driving the increased portfolio occupancy and reinforcing resilient demand for the style of industrial assets that CIP owns in urban infill markets.
I think the future looks very promising for this ASX dividend share for both reliability and growth.
