Commonwealth Bank of Australia (ASX: CBA) is a powerful ASX dividend share with an impressive market share and a proud record of paying pleasing passive income to shareholders.
However, CBA is not one of the businesses I'd buy for dividends, as impressive as the ASX bank share has been.
FY26 saw the business hike its annual dividend per share by 4% to $5.05. At the time of writing, that translates into a grossed-up dividend yield of 4.7%, including franking credits.
For me, there are other ASX dividend shares that offer a more compelling dividend yield and/or significantly more dividend growth potential. The following two stocks are much more appealing to me.
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L1 Long Short Fund Ltd (ASX: LSF)
This business is a listed investment company (LIC), which means it invests in other shares/assets on behalf of shareholders. Having that diversification within a single investment is appealing compared to CBA, which is just one business and has a significant focus on providing home loans in Australia (an area of slow growth at best, right now).
L1 generally likes to look at industries and specific businesses that don't get as much investor attention and don't trade on high price-to-earnings (P/E) ratios. The investment team has delivered significant success in industries such as materials, industrials, and communications services.
Buying (and selling) materials shares at the right times can be very effective as investments because of how cyclical they can be.
At the end of August 2026, the ASX dividend share's portfolio registered an average net return of 17.1% per year over the prior five years, which is strong enough to deliver both capital growth and good dividends.
In FY26, the LIC grew its annual payout by 14.5% – a much stronger growth rate than CBA.
I expect the next four quarterly dividends from L1 Long Short Fund will come to at least 16.2 cents per share, which would be a grossed-up dividend yield of 4.8%, including franking credits.
WCM Quality Global Growth Fund – Active ETF (ASX: WCMQ)
The other ASX dividend share I want to highlight is this exchange-traded fund (ETF) offering from WCM.
WCM is a fund manager based in Laguna Beach, California. That's a deliberate choice to be so far away from the noise of Wall Street in New York.
There are two key criteria that WCM considers when evaluating a company for this portfolio. It must have a growing competitive advantage (an expanding economic moat) and a corporate culture that supports the expansion of that moat.
The fund manager believes that the direction of the economic moat is more important than the absolute width or size. Therefore, seeing a rising return on invested capital (ROIC) – one of the main ways it measures that improvement – is more important than a large but static or declining economic moat.
Additionally, WCM has team members solely dedicated to analysing the corporate culture of a business.
Since the WCMQ ETF's inception in August 2018, its portfolio has returned an average of 14.9% (net), compared to a 12.8% return per year for the global share market.
The ASX dividend share aims to provide a minimum annualised cash dividend yield of 5%. That's a stronger starting yield than CBA shares, and I expect the distribution can grow at a faster pace over the long term by focusing on high-quality shares.
