The ASX blue-chip share space is a compelling hunting ground to find businesses with a very pleasing dividend yield.
The larger businesses on the ASX aren't usually priced for a lot of growth, meaning they have a relatively lower price-earnings (P/E) ratio and this boosts the dividend yield.
Additionally, large businesses tend to have less reason to hang onto as much cash for growth as smaller, growing companies. A more generous dividend payout ratio can also lead to a higher dividend yield.
So, let's dive into two businesses that offer investors significantly higher dividend yields than the market.
Image source: Getty Images
Medibank Private Ltd (ASX: MPL)
Medibank is the largest private health insurer in Australia, with the Medibank and ahm brands. It also has an expanding Medibank Health division, which includes primary care following acquisitions. Medibank Health also includes community-based services and acute home health.
Healthcare is a defensive sector that can provide investors with resilient earnings and that means it can provide a reliable dividend. The business noted in a recent update that it has proven growth through cycles, delivered customer and shareholder value, while navigating headwinds.
Medibank also noted that APRA's quarterly private health insurance statistics showed industry growth of 2.1% in the 12 months to 31 December 2025. Increasing participation in younger cohorts is supporting ongoing affordability and long-term industry sustainability.
The ASX blue-chip share may also benefit from Australia's ageing demographic and growing population.
Between the FY15 and FY26 half-year results, it increased its annual payout every year aside from FY20, which was impacted by COVID-19. It has a great track record of regular dividend growth.
According to the projection on CMC Invest, the business is forecast to pay an annual dividend per share of 19 cents for FY26. That translates into a grossed-up dividend yield of 5.6%. including franking credits, at the time of writing.
WAM Leaders Ltd (ASX: WLE)
This is a listed investment company (LIC) run by Wilson Asset Management (WAM). It aims to invest in the most attractive, larger businesses on the ASX.
By investing in ASX blue-chip shares, its portfolio can be more resilient than ASX growth shares.
Some of the largest 20 positions in the WAM Leaders portfolio includes ANZ Group Holdings Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Goodman Group (ASX: GMG), Macquarie Group Ltd (ASX: MQG), National Australia Bank Ltd (ASX: NAB), REA Group Ltd (ASX: REA), Rio Tinto Ltd (ASX: RIO), Westpac Banking Corp (ASX: WBC), Woodside Energy Group Ltd (ASX: WDS), and Wesfarmers Ltd (ASX: WES).
As you can see, the LIC's portfolio has a significant focus on ASX blue-chip shares.
Its portfolio outperformed the S&P/ASX 200 Accumulation Index (ASX: XJOA) since inception in May 2016, with a gross return of 11.9% per year (before fees, expenses and taxes) compared to the index return of 9% per year. Of course, past outperformance is not a guarantee of future performance.
WAM Leaders has increased its annual dividend every year between FY17 and FY25. It expects to increase its FY26 annual payout by 2.1% to 9.6 cents per share. That translates into a potential grossed-up dividend yield of 10.4%, including franking credits, at the time of writing.
