The ASX share market is one of the best places to find good passive income, in my opinion. That's because some opportunities have an exceptionally high dividend yield.
I wouldn't buy just anything, though. I'd want to ensure I have a high degree of confidence that the business is going to continue delivering stable (and hopefully growing) payouts.
Let's look at two of the highest-yielding ASX shares that I expect to continue to deliver good dividends.
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Hearts and Minds Investments Ltd (ASX: HM1)
This is a listed investment company (LIC) that can give significant passive income and a compelling level of diversification.
LICs are companies that simply invest in other shares to help them generate returns. Dividends can then be funded from those investment profits.
Hearts & Minds is quite different to most other LICs. Firstly, there are no management fees or performance fees. Instead, 1.5% of net assets are donated to medical research organisations.
A minority of the portfolio is decided at an investment conference where several investment experts each pitch their best idea such as Brookedale Senior Living.
A majority of the portfolio is chosen by core portfolio managers, who have (currently) chosen names like Nvidia, Microsoft, Amazon and TSMC.
Its portfolio has performed adequately over the longer-term, with an average return per year of 12.8% after expenses.
The board of the ASX share have "resolved" to increase dividends by 0.5 cents per share every six months for the foreseeable future. That means the next two dividends should amount to 20.5 cents per share, equating to a grossed-up dividend yield of 10.5%, including franking credits, at the time of writing. That's a great starting yield, in my books.
Shaver Shop Group Ltd (ASX: SSG)
The other ASX share I really want to highlight is Shaver Shop, a leading retailer in the hair removal space. It sells things like electric shavers, clippers, trimmers, and wet shave items. The company also sells items like oral care, hair care, massage and beauty categories.
Shaver Shop has impressed me with its reliable dividend over the last several years. It started paying a dividend in 2017 and has increased it every financial year since, aside from FY24 when it maintained it at 10.2 cents per share.
The last two half-year dividend payments total 10.3 cents, which translates to a grossed-up dividend yield of 11.5%, including franking credits, at the time of writing.
If the business continues its reliable dividend record, then I'd expect the next 12 months to offer that level of passive income for shareholders.
I view hair removal as a fairly consistent sector considering how hair just keeps growing – it's more defensive than I think some investors give it credit for.
Shaver Shop has a number of levers it can pull it grow earnings, including adding more stores to its ANZ network, selling more online, growing its private label brand (Transform-U), signing additional exclusive agreements with quality brands, and selling more products in other categories like oral care, hair and beauty.
According to the projection on CMC Invest, it's valued at just 11x FY26's estimated earnings.
