ASX blue-chip shares can be among the best options for passive income because of both their dividend yields and the stability they provide.
Businesses that are market leaders in their sector can be a very effective choice because they are much stronger than competitors, with scale and margin advantages.
The two businesses below have a strong track record of paying dividends, and I expect compelling dividend payouts in the months and years ahead.
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JB Hi-Fi Ltd (ASX: JBH)
JB Hi-Fi is one of the leading retailers in Australia and New Zealand, with its JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and E&S Trading businesses.
The ASX blue-chip share is arguably the market leader in electronics and appliances in Australia, and it continues to work on improving its position through new stores, increased scale, and a low-cost operating model.
JB Hi-Fi has grown its annual dividend in most years over the last 13 years, which is impressive to me for a retailer.
The business doesn't typically trade on a high price/earnings (P/E) ratio, which means its dividend yield can be attractive.
According to Commsec's projection, the business is forecast to pay an annual dividend per share of $3.38 in FY26. That translates into a possible grossed-up dividend yield of 5.9%, including franking credits.
Electronics and appliances remain an essential element for many households, so I expect the company can deliver fairly defensive earnings during this period of higher inflation and interest rates (again).
Telstra Group Ltd (ASX: TLS)
Telstra is Australia's leading telecommunications business with the most subscribers, the widest network coverage and seemingly the best spectrum assets to deliver its service.
The ASX blue-chip share has leveraged its market position in Australia with regular price increases. Unlocking more revenue from the same number of subscribers should improve its margins, since costs aren't increasing at the same pace.
Australia is becoming increasingly digital for households, businesses and government, which gives the company defensive earnings. Plus, Australia's growing population gives the business a tailwind to win more subscribers.
According to Commsec's projection, the business is forecast to pay an annual dividend per share of 21 cents in FY26. That translates into a possible grossed-up dividend yield of 5.8%, including franking credits.
The business has a strong chance of increasing its dividend in FY27 and is expected to raise its annual payout to 21.5 cents per share, according to projections on Commsec.
