Investors wanting to grow wealth relatively quickly may not necessarily want high levels of passive income because that could mean paying more of the return to the Australian Taxation Office. Capital gains aren't taxed until an asset is sold.

However, for investors in retirement or who have a low tax rate, ASX dividend shares with a large dividend yield could be a rewarding pick.

Hearts and Minds Investments Ltd (ASX: HM1)

This is one of the high-yield ASX shares that I've added to my own portfolio because of the investment exposure and high levels of passive income.

It's a listed investment company (LIC), meaning it doesn't sell products or services. Instead, the business has an investment portfolio that it aims to make investment returns with.

Dividends are paid from the positive investment returns, which allows it to pay steadily growing passive income. The company is aiming to increase its payout every six months by 0.5 cents per share.

The next two dividends to be declared should come to a total of 20.5 cents per share, which would translate into a grossed-up dividend yield of 10.3%, including franking credits.

Hearts & Minds donates 1.5% of its portfolio to medical research, it's able to do that because all of the investment picks are contributed for free by investment experts.

Some of the portfolio is decided by a core group of portfolio managers, while the rest is contributed at an annual investment conference, where some experts pick their best stock idea.

This process results in a largely global portfolio and the recent volatility could mean it's a compelling time to invest.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leading ASX retail share that sells a variety of hair removal products. Considering how important hair removal is for many Australians, I think the business has relatively defensive earnings for a retailer.

The business has benefited from the steady growth of its store network, as well as the expansion of its own brand called Transform-U. Building its own brand can come with higher gross profit margin and stronger control of what products it sells.

But, the ASX dividend share also has a number of exclusive products from quality shaving brands, giving it a unique selling point (USP) for customers.

Pleasingly, the business has grown or maintained its dividend every year since 2017, so we're almost at a decade of dividend reliability.

The last two half-year dividends come to a grossed-up dividend yield of close to 11%, including franking credits.

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Shaver Shop describes itself as an Australian and New Zealand specialty retailer of male and female grooming products. It aspires to be the market leader in 'all things related to hair removal'. It sells items like electric shavers, clippers, trimmers, wet shave items, oral care, hair care, massage, air treatment and beauty categories.

At the end of the FY26 half-year period, it had 126 Shaver Shop stores across Australia and New Zealand, while also having online marketplaces. It sells a wide range of brands, with some exclusive products with suppliers.

Now that you know what it does, let's take a look at why it's so compelling.

Excellent ASX passive income stock credentials

The business has one of the highest dividend yields on the ASX.

Its last two declared half-year dividends come to 10.3 cents per share. At the time of writing, this represents a grossed-up dividend yield of 10.7%, including franking credits. That's huge! It also looks like a 'real' yield to me.

Some businesses have very large dividend yields because the share price has dropped and the market is expecting a decrease of earnings (and the dividend).

Shaver Shop has paid a dividend each year since 2017. It increased its dividend every year in that time aside from FY24 when it maintained the dividend.

I think it's very likely that the business can continue to maintain its dividend at this level and possibly grow it in the longer-term. In the FY26 half-year result it maintained its interim dividend at 4.8 cents share amid 1.5% growth of net profit to $12.2 million.

Its FY25 dividend payout ratio was 89.6% of net profit, which is fairly high but sustainable because it was under 100%. It kept some of the generated profit to improve the business.

Why I think this is a great time to invest

There are a few reasons why this looks like a great time to invest.

First, at the time of writing, the Shaver Shop share price has dropped 11% since the end of February 2026, which has had a big, positive effect on the dividend yield on offer from the ASX passive income stock.

Second, the business is looking to grow its earnings through store growth, expanding its own brand (Transform-U), unlocking more exclusive products and hopefully benefit from increased scale.

Third, it's trading on a very low price/earnings (P/E) ratio. According to the forecast on CMC Markets, the business is projected to generate earnings per share (EPS) of 11.6 cents. That means it's valued at 12x FY26 estimated earnings.

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It has a large dividend yield and a track record for increasing payouts, which is rare for an ASX retail share.

The business could provide an investor with an annual income of $1,000 or more with a large enough investment. Let's look at the income potential of one of the leading Australian retailers of shaving products.

Great dividend potential

Pleasingly, the business has never given investors an annual dividend cut, which is a very pleasing record of consistency.

In fact, since it started paying a dividend in FY17, FY24 was the only year that it didn't increase its payout (so far).

Its latest two declared half-year dividends came to 10.3 cents per share, which currently translates into a grossed-up dividend yield of 10.3%, including franking credits, at the time of writing.

In the FY26 half-year result, the business decided to maintain its interim dividend at 4.8 cents per share.

If the business maintained its payout in FY26 at 10.3 cents per share, it would be a great result for shareholders because that would still represent a double-digit dividend yield, including franking credits.

Making $100 per month of passive income

The business doesn't pay a dividend every month, so we can think of the goal as an annual total and then divide that by 12.

$100 per month would translate into an annual total of $1,200.

To receive $1,200 (excluding franking credits) with an annual dividend per share of 10.3 cents, an investor would need 11,651 shares of the ASX stock.

Why it could be a good ASX stock investment for the long-term

The business has built up an impressive position and continues to grow.

Despite the challenging trading conditions, in the first six months of FY26, total sales grew 2.2% to $128.6 million, operating profit (EBIT) increased 2.5% to $18.1 million and net profit grew 1.5% to $12.2 million.

Total sales growth started strongly in the second half of FY26 to 22 February 2026, with overall growth of 3.8% and online sales growth of 12.7%.

I'm expecting the ASX stock to grow its bottom line and profit margins thanks to a slowly growing store count, more online sales, exclusive products with certain brands and growing its own Transform-U brand.

According to the projection on CMC Invest, the Shaver Shop share price is valued at just 12x FY26's estimated earnings.

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Businesses with high dividend yields aren't necessarily the best choice because those payouts could be at risk of reduction.

The following businesses have a track record of giving shareholders regular dividend increases.

Future Generation Australia Ltd (ASX: FGX)

This is a listed investment company (LIC) that enables investors to gain exposure to a portfolio of fund managers' funds who work for free and generally target smaller companies with plenty of growth potential.

These fund managers work for free to enable Future Generation Australia to donate 1% of its net assets each year to youth charities.

Some of the fund managers involved include Paradice, L1 Group Ltd (ASX: L1G), Vinva, Firetrail, Wilson Asset Management and Eley Griffiths.

Future Generation Australia has been using some of the investment profits it has made to pay out a growing dividend. It has increased its payout every year for the last decade – not many ASX dividend shares can point to a record like that.

The latest annual dividend it announced was 7.2 cents per share, representing a grossed-up dividend yield of 7.9% at the time of writing, including franking credits.

Impressively, the ASX dividend share has donated $49 million since its inception, which is an excellent initiative.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the leaders in Australia in the retail of shaving products. It has 126 stores across Australia and New Zealand.

Its core product range comprises electric shavers, clippers, trimmers and wet shave items It also retails products such as oral care, hair care, massage, air treatment and beauty categories.

Pleasingly, the business has increased annual dividend per share every year since 2017 aside from FY24 when it maintained the payout.

The last two dividends paid by the business come to 10.3 cents per share. At the time of writing, Shaver Shop offers a grossed-up dividend yield of 10.9%, including franking credits.

Shaver Shop is pursuing a few different growth avenues including opening more stores across Australia and New Zealand, it's growing its own brand (Transform-U), and it's working with shaving brands to offer exclusive products.

I think this ASX dividend share is one of the best options for a dividend yield of more than 10% with its track record.

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Two ASX dividend shares stand out right now: Perpetual Ltd (ASX: PPT) and Shaver Shop Group Ltd (ASX: SSG). Both deliver attractive yields around 7%, and brokers see meaningful upside ahead.

Let's take a closer look.

Perpetual: Sharpen execution, unlock value

Perpetual is a well-known financial services group, operating across asset management, wealth management, and corporate trust. But the ASX dividend share is undergoing a major shift.

Last week, the company announced the $500 million sale of its wealth business to Bain Private Equity. The move is all about simplification. By narrowing its focus, Perpetual aims to sharpen execution and unlock value.

Management of the ASX dividend share says proceeds will be used to reduce debt and invest in organic growth across its remaining divisions. That's a positive signal for dividend sustainability.

Perpetual has a long-standing reputation in funds management and a solid institutional footprint. The business is becoming leaner, which could improve margins over time.

However, earnings can be sensitive to market movements. Funds under management can fluctuate, and execution risk remains as the company reshapes itself.

This ASX dividend share shines when dividend payouts come into play. Analysts at Macquarie expect a 7% dividend yield this financial year, easing slightly to 6.7% in FY27 and 6.4% in FY28. That's still comfortably above market averages.

And there's potential capital upside too. Macquarie has a bullish price target of $24.60 on the ASX dividend share. The broader consensus sits at $20.32, about 26% above current levels.

Shaver Shop Group: Strong niche, growing online sales

Shaver Shop is one of the region's leading retailers of personal grooming products. Think electric shavers, clippers, trimmers, and wet shave essentials. It operates 126 stores across Australia and New Zealand, alongside a growing online channel.

This is a steady, cash-generative retail business. Grooming products tend to have repeat demand, and Shaver Shop has built a strong niche. Its online sales are also gaining traction.

Recent numbers back that up. In the second half of FY26 to 22 February 2026, total sales rose 3.8%, while online sales jumped 12.7%. That kind of growth can support future earnings — and dividends.

Like all retailers, this ASX dividend share is exposed to consumer spending cycles. Cost pressures and competition could also weigh on margins.

Shaver Shop has an impressive dividend track record. It increased its dividend every year from 2017 to 2023, held steady in 2024, and nudged it higher again in FY25.

Right now, the stock offers a grossed-up yield of 10.7%, including franking credits. That's exceptionally high.

And it's not just about income. Analysts see upside in the share price too, with an average target of $1.71. That's a 29% upside at current levels.

The bottom line

Perpetual and Shaver Shop tick two key boxes: strong passive income and growth potential.

They're not risk-free. No dividend stock ever is. But with yields around 7% or higher and double-digit upside on offer, both are worth a closer look for income-focused investors.

The post These ASX dividend shares pay 7% and could jump 25% appeared first on The Motley Fool Australia.

There's no specific yield that's the right level – it depends on how much passive income an investor is trying to generate from their portfolio. The higher the yield goes, the riskier/less reliable it may be.

But, there are a few ASX shares that offer a very large dividend yield, but have also offered consistent payouts.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the largest retailers of male and female grooming products including electric shavers, clippers, trimmers and wet shave items. The company has 126 Shaver Shop stores across Australia and New Zealand.

The company has a very steady dividend record. It increased its annual dividend per share every year between 2017 to 2023, maintained it in 2024 and then grew it slightly in FY25.

At the time of writing, it has a grossed-up dividend yield of 10.7%, including franking credits, which is incredibly attractive, in my view.

I think dividend growth looks likely because in the second half of FY26 to 22 February 2026, it reported total sales growth of 3.8% and online sales growth of 12.7%.

With initiatives like growing its store network, increasing online sales, expanding its own brand (Transform-U) and working with additional brands for exclusive products.

Future Generation Global Ltd (ASX: FGG)

I really like listed investment companies (LICs) as passive income options because of how they can determine what size dividend to pay each year, assuming they have the profit reserves to do so.

Future Generation Global has invested in a number of funds that are focused on international shares. I like this strategy because it means being able to hunt for opportunities from across the world, giving great diversification and a good opportunity to find high-performing investments.

Pleasingly, the fund managers don't charge management fees (or performance fees). Instead the LIC donates 1% of its net assets each year to youth mental health charities.

The ASX share has increased its annual payout each year starting in 2019, which is an impressive record of dividend growth considering everything that has happened between now and then.

Ignoring the recently-announced special dividend of 3 cents per share, its 2025 annual regular dividend came to 8 cents per share, representing a year over year increase of 8.1% year-over-year.

The 8 cents per share payout for FY25 translates into a regular grossed-up dividend yield of 7.3%, including franking credits. I think that's a great starting point for the dividend income.

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I'm not about to suggest that Aussies go out there and try to find a 15% dividend yield.

But, if we invest right, investors could end up generating a 15% yield on their initial investment. It will take some patience, though.

It's important to remember that some large dividend yields may not stand the test of time. A dividend cut may be on the cards for businesses that seem to have huge yields because investors have pushed the share price lower, betting that earnings and the payout are going to drop in the near future.

 I think there are two ways where we can unlock a large dividend yield of 15% (or more). Let's look at how.

Big starting dividend yield

I wouldn't expect any business to offer a sustainable starting dividend yield of 15%. But, there are some with yields of between 9% to 11% where I expect the business can maintain and slowly grow its payout in the coming years.

While it might take a while to reach 15%, I think this sort of business could deliver a big dividend yield at the start and become even larger over time.

There are some names that come to mind for large payouts such as WAM Microcap Ltd (ASX: WMI), Hearts and Minds Investments Ltd (ASX: HM1) and Shaver Shop Group Ltd (ASX: SSG).

With those sorts of dividend yields, if someone invested $10,000 then they could unlock $1,000 of annual income straight away.

Dividend growth

While huge yields may appeal to some investors, it could be a better call to look at businesses that are growing their payout at a faster pace. That could lead to stronger total shareholder returns (TSR) and eventually the yield could surpass what a higher-yielding business offers.

For example, if a 10% yielding business grows its payout by 2% per year, it becomes 15% yield in around 20 years. A business with a 5% dividend yield that's growing the payout at 10% per year becomes a 15% dividend yield on the initial investment after 12 years.

Of course, we can't know for sure what businesses are going to do with their payouts over the next decade or more.

What sort of businesses have a solid starting payout today and could deliver strong dividend growth over the longer-term?

I'd look at apparel retailer Universal Store Holdings Ltd (ASX: UNI), jewellery retailer Lovisa Holdings Ltd (ASX: LOV), investments business Pinnacle Investment Management Group Ltd (ASX: PNI) and ethical fund manager Australian Ethical Investment Ltd (ASX: AEF).

Either way, I think there are some very exciting investments out there for investors looking for a lot of passive income.

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A good passive income stock is one that can provide resilient dividends and grow its underlying value over time.

There's not much point buying high-yield ASX dividend shares if the share price and dividend decline over time.

So, I'm going to highlight two high-yield names that have a record of consistency and I think could deliver rising payouts over time.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop has a goal to become the leader of hair removal products in Australia, with its national store network selling a variety of male and female wet and dry shave products.

The company recently released its FY26 half-year result which included positive numbers.

In the six months to 31 December 2025, sales grew 2.2% to $128.6 million, operating profit (EBIT) grew 2.5% to $18.1 million and net profit after tax (NPAT) climbed 1.5% to $12.2 million.

Pleasingly, online sales increased by 7.4% and the gross profit margin grew 100 basis points (1.00%) to 46.5%). The main driver of the ASX dividend share's gross profit improvement was the expansion of its private brand Transform-U.

Work on the store network in the HY26 period is supportive sales growth in the second half of FY26 and FY27. It opened two locations in the first half, with another one planned to open in March 2026. It also refitted one full store and relocated one in the half, with three full store refits and two relocations planned for the second half.

All of the above helped the business maintain its annual dividend per share at 4.8 cents per share in the HY26 result.

In terms of passive income appeal, the ASX dividend share increased its payout each year between FY17 and FY23, maintained it in FY24 and then grew it again in FY25 to 10.3 cents per share. That translates into a grossed-up dividend yield of 9.4%, including franking credits, assuming it just kept the dividend the same in FY26.

In the second half of FY26 to 22 February 2026, total sales grew 3.8%. I think this bodes well for another dividend increase in FY26, particularly if Transform-U continues growing.

Hearts and Minds Investments Ltd (ASX: HM1)

The other high-yield ASX dividend share I want to highlight is Hearts & Minds, a listed investment company (LIC).

Pleasingly, there are no management fees or performance fees involved with the portfolio. Instead, it donates 1.5% of its net assets each year to medical research to a variety of organisations. This could unlock life-changing, or life-saving, medical advancements.

The Hearts & Minds portfolio is constructed from two different sources. First, there's a core group of fund managers that make picks for the portfolio. Second, it holds an annual investment conference where leading investment professionals choose a single stock that could perform.

This approach provides both diversification and can lead to solid returns. The three years to December 2025 showed an average portfolio return of 14.7% per year. That's a high enough return to fund a large and growing dividend, while also seeing growth in the portfolio value.

Hearts & Minds recently declared a half-year dividend of 9.5 cents and intends to increase its payout by 0.5 cents per share every six months for the foreseeable future. The implied annual dividend per share of 19.5 cents for FY26 translates into a grossed-up dividend yield of 9.4%, including franking credits.

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But I wouldn't buy any business for passive income just because it has a good yield. Dividends can be cut, so it's important to consider what will help the business continue that dividend streak.

I'd also want to see that the business has a history of not cutting the dividend. Past reliability is not a guarantee, but it's a useful indicator of what can happen during different economic conditions.

WAM Microcap Ltd (ASX: WMI)

This is a listed investment company (LIC) that's operated by the team at Wilson Asset Management (WAM). It's focused on finding the best opportunities in the ASX small-cap share end of the market.

The ASX share's FY25 payout translates into a grossed-up dividend yield of just over 9% (at the time of writing), including franking credits, which was a slightly higher payout than the FY24 dividend.

It has been very consistent: it increased its regular annual payout each year between FY18 and FY23, maintained it in FY24, and then hiked it again in FY25. In other words, there have been no dividend cuts in its existence.

WAM Microcap has managed to fund its dividend thanks to the investment returns its portfolio has generated. At the end of December 2025, its portfolio had returned an average return per year of 16.7% since inception in June 2017, before fees, expenses, and taxes.

It already has a profit reserve of around five years of dividends at the current level, and I think it can continue funding slightly bigger payouts. The small end of the share market is compelling for finding investment opportunities due to its growth potential.  

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of Australia's underrated ASX dividend shares, in my opinion.

It retails a wide array of hair removal products in Australia and New Zealand, with both male and female products across its store network and website.

Shaver Shop increased its payout each year from 2017 to 2023, maintained the dividend in FY24, and then increased it slightly in FY25. Its FY25 grossed-up dividend yield is around 9.5% at the time of writing, including franking credits.

I think the business has quite defensive earnings – hair grows in all economic conditions. That makes for consistent demand for its products, in my view.

Shaver Shop is one of the leaders in hair removal retailing, which is why multiple shaving brands have agreed to exclusive products with the business. This helps the ASX share provide unique products and deliver a stronger gross profit margin.

Shaver Shop is also working hard at expanding its own brand called Transform-U, helping it fill in different products across its overall range, which means a stronger gross profit margin on those sales.

It can grow earnings as it expands its store network, sells more online, and expands its Transform-U range.

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Many investments available on the ASX (and internationally) pay dividends, as they share profits with shareholders each year. With shares, you don't need to deal with tenants, leasing agents or repairs.

It's easy to take a back seat with shares; that's why I think it's the best form of passive income.

Businesses aren't like term deposits – they can grow earnings, increase dividends, and increase share prices. Some businesses on the stock market can provide a better yield than savings accounts straight away.

The power of a dividend yield

If we put $1,000 into a bank account earning 4% interest, we'd expect to earn $40 in annual income.

Investing in stocks comes with different dividend yields. The higher the dividend yield, the more money investors will get. The highest yields (of 10% or more) aren't necessarily safer, though.

Telstra Group Ltd (ASX: TLS) is an example of a good ASX dividend share. Telstra's annual payout last year was 19 cents per share, which translates into a 4% cash dividend yield. Franking credits boost the after-tax effect of receiving the dividend (often leading to tax refunds). Including franking credits, Telstra's FY25 payout equated to a grossed-up dividend yield of 5.75%.

At the current Telstra share price, a $1,000 investment would yield $57.50 in passive income in FY25.

I think there's a good chance Telstra will increase its payout to 20 cents per share in FY26, which would yield just over $60 of grossed-up passive income (including franking credits). That's an increase of around 5%.

Savings in the bank account don't grow like that. You can leave the cash in there (and not utilise the interest), but investors can also reinvest their dividends to accelerate wealth-building.

It also shows how making a $1,000 investment can snowball into more passive income for investors.

There's more to the stock market than just Telstra shares, of course.

The stock market is a money-making machine for passive income

Some ASX-listed businesses have a record of growing their dividends every year for 20 years in a row, like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA).

There are some investments with very high dividend yields (over 9%) that haven't given any payout reductions (though payout growth is slow), such as Shaver Shop Group Ltd (ASX: SSG) and WAM Microcap Ltd (ASX: WMI).

There are a number of other ASX dividend shares that are appealing as passive income options like MFF Capital Investments Ltd (ASX: MFF), L1 Long Short Fund Ltd (ASX: LSF), Pinnacle Investment Management Group Ltd (ASX: PNI), Universal Store Holdings Ltd (ASX: UNI), Charter Hall Long WALE REIT (ASX: CLW), Centuria Industrial REIT (ASX: CIP), Rural Funds Group (ASX: RFF) and WCM Quality Global Growth Fund (ASX: WCMQ).

Many of the above investments offer a dividend yield of 5% or more, which is appealing in my book.

Receiving $12,000 annually (or $1,000 per month) at a dividend yield of 5% would require a $240,000 portfolio.

That portfolio goal may sound like a lot, but if an investor invested $1,500 per month and their portfolio returned an average of 10% per year (the long-term average of the share market), it would only take around nine years to reach $240,000. It just takes investing in the right stocks.

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The biggest dividend yields aren't necessarily the only ones worth looking at, though one of the names I'll look at today does have a very high yield.

Businesses that reward investors with rising dividends are very appealing to me. The below are three with impressive dividend growth records.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the leader on the ASX that when it comes to dividend growth. The business has grown its annual regular dividend every year since 1998.

It has the smallest payout out of the three names in this article, with a grossed-up dividend yield of 3.9%, including franking credits.

But, I have the most confidence in this ASX dividend share growing its payout because of how it's funded by the cash flow of its investment portfolio.

It's invested in industries such as industrial properties, building products, resources, telecommunications, swimming schools and agriculture.

By generating profit from numerous sectors, it has diversified its risks and looked broadly for opportunities. This helps secure its future cash flow generation and dividend payments.

Rivco Australia Ltd (ASX: RIV)

Rivco owns a portfolio of permanent water entitlements based in south east Australia. The water can be leased to farmers on short-term or long-term leases, generating lease income for the company.

This ASX dividend share is a pleasing way to benefit from Australia's agricultural sector without some of the risks/volatility.

If water values increase over time, which I think they will, then the company can deliver capital growth too.

The business has increased its payout every six months since 2017, and currently has a grossed-up dividend yield of 6.9% (including franking credits).

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop sells a wide variety of male and female hair removal products from its store network of more than 120 locations.

The ASX dividend share has proven to have resilient sales during the last few years, showing consistent demand for its items. Hair doesn't stop growing, after all.

One of the most pleasing aspects of the ASX dividend share's business model is that it has made agreements with multiple shaver brands, unlocking exclusive products for consumers.

Impressively, the business grew its annual dividend per share each year between 2017 and 2023. It maintained the payout in 2024 and then increased the payout in 2025 to 10.3 cents per share.

At the current valuation, the FY25 payout translates into a grossed-up dividend yield of 9.4%, including franking credits. Growth is not guaranteed, but if it does increase the payout to 10.4 cents per share, it would represent a grossed-up dividend yield of 9.5%, including franking credits. That sounds like very pleasing passive income to me.

The post 3 great ASX dividend shares to buy in 2026 appeared first on The Motley Fool Australia.

I'm going to highlight businesses with high dividend yields that I think have a good chance of increasing their payouts in the short- and long-term.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leader in Australia and New Zealand in retailing hair removal products across its 125 stores. It sells items such as electric shavers, clippers, trimmers, and wet-shave items. It also sells a range of products across the oral care, hair care, massage, air treatment, and beauty categories.

The company's market prominence has enabled it to offer exclusive products from certain suppliers, giving it a unique selling point for customers.

The ASX dividend stock is looking to grow its profits by opening new stores, offering a wider range of beauty and self-care items, selling more online, and growing its own brand, Transform-U. A recovery in overall Australian consumer spending could also help improve profit.

It increased its annual dividend per share each year from 2017 to 2024. It maintained the dividend per share in FY24 and then grew the payout again to 10.3 cents per share in FY25. At the time of writing, this translates into a grossed-up dividend yield, including franking credits, of 9.6%.

I expect it will increase the payout again by another 0.1 cent per share in FY26, which would give the business a grossed-up dividend yield, including franking credits, of 9.7%.

Chartre Hall Long WALE REIT (ASX: CLW)

This business is a real estate investment trust (REIT) that owns a vast portfolio of commercial properties across Australia.

It has deliberately built its portfolio to include properties on long-term leases with tenants. It had a weighted average lease expiry (WALE) of around 9 years at June 2025, providing investors with long-term stability.

I like how the ASX dividend stock has built its portfolio to include a number of sectors, including pubs and hotels, Bunnings properties, telecommunications exchanges, grocery and distribution centres, food manufacturing and more.

In a move that's good for the distribution yield, it pays out 100% of its operating earnings each year. It's expecting to pay a distribution per unit of 25.5 cents in FY26 – an increase from 25 cents per unit in FY25. The projected payout translates into a distribution yield of  6.4%.

Another benefit of the passive income from the ASX dividend share is that payments are delivered quarterly, providing investors with a steady stream of income throughout the year.

While these aren't the only two high-yield names, they're two I expect to increase the payout in FY26.

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We all only have so much time to work for earnings. It'd be beneficial to have a portfolio of shares paying a growing source of passive income to our bank accounts that we don't have to actively work for ourselves.

How much of a second income could a $20,000 investment pay? That entirely depends on the dividend yield.

For example, if someone's portfolio had a 5% dividend yield, then $20,000 would generate $1,000 of annual income.

That's just the first year, though.

If the payout grew at a compound annual growth rate (CAGR) of 7.5% for the foreseeable future, it would grow into $1,436 of annual income after five years and $2,061 after ten years.

That sounds good, right?

The next question is what to invest in.

Many of the most popular ASX-listed exchange-traded funds (ETFs) aren't known for having good dividend yields. I'll run through some compelling options.

Portfolio investments

When we think about investing in a particular company, like BHP Group Ltd (ASX: BHP), that money is allocated to just one business.

Wouldn't it be great if we could put our money into an investment and it's already diversified instantly?

There are some investments that can provide a pleasing mixture of both a good dividend yield and capital growth. I'm thinking of investment businesses like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), MFF Capital Investments Ltd (ASX: MFF), and Future Generation Australia Ltd (ASX: FGX), which have a good long-term record of payout growth. I think these are great options for a second income.

I'll also point out a couple of impressive actively-managed ETFs that target a dividend yield for investors and have strong long-term portfolio performance, such as WCM Quality Global Growth Fund (ASX: WCMQ) and Montgomery Global Equities Fund (ASX: MOGL).

Companies

There are a number of companies on the ASX that derive their earnings from operations.

I'd only focus on businesses that have an attractive long-term future and that have a history of growing their payouts and offer a good dividend yield today.

Some of the most appealing ASX dividend shares, in my opinion, are Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Medibank Private Ltd (ASX: MPL), Pinnacle Investment Management Group Ltd (ASX: PNI), Shaver Shop Group Ltd (ASX: SSG), and APA Group (ASX: APA).

Real estate investment trusts

The final area of investments that could unlock a pleasing second income is real estate investment trusts (REITs) – these are businesses that own significant commercial real estate.

There is a wide variety of REITs that Aussies can buy, including industrial, shopping centres, farms, self-storage, office, social, and healthcare.

Investors can benefit from the rental profits as well as the long-term appreciation of land prices. Some of my favourite REITs for income and capital growth are Centuria Industrial REIT (ASX: CIP), Charter Hall Long WALE REIT (ASX: CLW), Rural Funds Group (ASX: RFF), and Abacus Storage King (ASX: ASK).

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Certain businesses are able to produce very big dividend yields thanks to a mixture of a generous dividend payout ratios and low valuations. While consistent dividends aren't guaranteed, I think it looks like the following businesses can continue delivering large payouts.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is an underrated retailer, in my view. It wants to be the leader of male and female hair removal, selling products like electric shavers, clippers, trimmers and wet shave items. It also sells items from the oral care, hair care, massage, air treatment and beauty categories.

The ASX dividend stock has increased its payout in almost every year since 2017, aside from when it maintained the payout in 2024.

The Shaver Shop share price is trading at less than 13x FY25's earnings, with a current grossed-up dividend yield of 10.2%, including franking credits, at the time of writing. I think the company's moves to open more stores and grow its own brand called Transform-U will help its bottom line. I also believe the ASX dividend stock's margins could rise in the coming years thanks to bigger scale and more private brand and exclusive product sales.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is an investment business that focuses on buying stakes in private technology businesses.

The company is invested across an array of software businesses including hotel management and room distribution, financial advice and investment management, digital healthcare and telehealth, tours and activities booking, volunteer management, AI-enabled property investment, and fitness and wellness.

Bailador looks for a number of characteristics with its targets, including being founder-led, having a proven business model with attractive unit economics, international revenue generation, having a huge market opportunity and the ability to generate repeat revenue.

It aims to provide investors with a dividend yield (excluding franking credits) of 4% of the net tangible assets (NTA). But, due to the fact that it's trading at a discount of around 40% to the November 2025 pro-forma NTA of $1.98, at the time of writing, it has a dividend yield of 6.6% or 9.4% including the franking credits.

Centuria Office REIT (ASX: COF)

The office sector has struggled over the last few years because of the impacts of working from home and higher interest rates. To me, it's not a surprise that the Centuria Office REIT unit price has dropped over 50% since September 2021.

However, I think there are signs that the business could be undervalued, while providing pleasing levels of passive income. For starters, it's trading at a discount of more than 30% to the stated NTA of $1.67 at 30 June 2025.

The ASX dividend stock's fund manager Belinda Cheung said in August:

COF continues to execute its strategy through active leasing as well as asset and capital management initiatives. Despite this, the office leasing momentum remains fragmented across Australian office markets and, accordingly, the FY26 FFO guidance range takes into consideration anticipated downtime and lease-up assumptions for existing vacancy and pending expiries across COF's portfolio.

Looking ahead, higher replacement costs and office withdrawals for alternate-use conversion is expected to stem future supply and reduce the market size to rebalance office markets, reducing future vacancy rates. COF's portfolio is well positioned to benefit from these future tailwinds.

It expects to pay a distribution of 10.1 cents per unit in FY26, translating into a potential distribution yield of 8.8%, at the time of writing.

Across the three businesses I've mentioned, they have an average yield of close to 9.5%. With investments totalling $3,500, that translates into annual passive income of $331, which is a rewarding starting point.

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ASX shares do come with higher risk than a term deposit because share prices can drop. But, share prices can rise too – they can deliver potential gains.

Today, I want to focus on why both of the following businesses could be better options than term deposits.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leading retailer of male and female grooming products such as electric shavers, clippers, trimmers and wet shave items.

On the dividend side of things, the business increased its payout each year between 2017 (when it started paying cash to shareholders) and 2023. The company maintained its dividend in 2024 and then increased its payout in 2025. Dividends aren't guaranteed, of course.

Term deposits provide consistent payouts without cuts or growth, while Shaver Shop has delivered payments with growth in all but one year (with no cuts along the way).

The business paid an annual dividend per share of 10.3 cents per share. At the current Shaver Shop share price, that translates into a grossed-up dividend yield of 10.2%, including franking credits.

I'm optimistic the business can continue growing its profit, and therefore the payouts, by expanding its store count (beyond the current 125), growing its own brand called Transform-U, gaining more exclusive products from top shaving brands and benefiting from the ASX share's scale.

Rural Funds Group (ASX: RFF)

Rural Funds is another pleasing option for passive income compared to term deposits, in my view. It's a real estate investment (REIT) that owns farmland across Australia in different states and climatic conditions.

It owns cattle, almonds, macadamias, vineyards and cropping, giving the business pleasing diversification and reducing risks. This strategy also means it can search across a wide array of assets to find the best opportunity in terms of the combination of income and long-term growth.

The business increased its distribution each year between 2014 to 2022. It has maintained its payout each year since then, despite the headwinds of higher interest rates. It has guided that it's going to pay the same amount in FY26, which translates into a future distribution yield of 5.75%.

I think its payout can grow in the coming years as its rental income grows – its farms have rental growth built-in, with either fixed annual increase or the growth is linked to inflation.

It's trading at attractive value, in my opinion, and I think it's a good, defensive option to own for the long-term.

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Term deposit interest rates have reduced, making the yields on offer from some businesses much more appealing.

Some businesses with higher yields can be a risk if those payouts are cut. What's the appeal of an 'income stock' if the income suddenly drops significantly or disappears entirely? I think the three stocks below have large and consistent dividends.

GQG Partners Inc (ASX: GQG)

GQG is one of the largest fund managers on the ASX, which provides investors with four main strategies: US shares, global shares, international shares (excluding the US) and emerging market shares.

In recent times, GQG has been defensively positioned with its funds' portfolios because of worries about AI-related valuations. It has recently been vindicated by that decision with plenty of tech/growth stocks falling back. Prior to that, GQG's funds had a long-term track record of outperforming its benchmarks.

I think the ASX dividend stock is still significantly undervalued after rising more than 20% in less than a month. It currently has an annualised dividend yield of 12.7% based on the latest announced quarterly dividend and it's trading at 7x its annualised distributable profit, which I think is very cheap if its funds under management (FUM) grows over the long-term.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop sells a wide variety of male and female premium shaving items from its store network of more than 120 stores.

The company's position in the market means that it has been able to secure a number of exclusive agreements with certain shaving brands, giving customers more of a reason to shop at the stores.

Excitingly, the high-yield ASX dividend stock is rolling out products for its own brand called Transform-U to fill gaps in Shaver Shop's item "range of quality, performance and/or price point driven". Transform-U is steadily adding new products to its range, which generates a higher gross profit margin.

On the dividend side of things, it increased its dividend every year since 2017, aside from FY24 when it maintained the dividend. It grew the annual dividend per share to 10.3 cents in FY25, translating into a grossed-up dividend yield of 9.9%, including franking credits.

Rivco Australia Ltd (ASX: RIV)

Rivco Australia (formerly know as Duxton Water Ltd) is a company that owns water entitlements which are leased to irrigators on short or long-term leases.

I like this high-yield ASX dividend stock as a way to indirectly invest in the Australian agricultural sector, which is an important part of the economy.

It can benefit from both the leasing income and a potential rise in the value of water entitlements over time.

Pleasingly, the business has increased its half-year payout every six months since 2017. Its latest paid dividends equate to a grossed-up dividend yield of 7.25%, including franking credits.

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Some businesses trade at relatively low multiples of their earnings, which can support a relatively high dividend yield. Additionally, some businesses may pay out a high level of their earnings each year, which can also lead to a higher dividend yield. When a business has both elements in its favour, that can mean a very high dividend yield.

The two ASX dividend shares I'll discuss both have the potential to yield double-digit dividends in the coming years.

GQG Partners Inc (ASX: GQG)

GQG is one of the larger listed fund managers on the ASX, with a market capitalisation of close to $5 billion. I think it's very good value at that price.

The business has been paying investors a dividend payout ratio of around 90% of its distributable earnings in recent times, which means a very good dividend yield for investors.

Its latest quarterly dividend alone equates to a dividend yield of 3.4%. That's an annualised dividend yield of close to 14%, at the time of writing.

If the business can just maintain its dividend at this level, then that's an impressive return by itself.

I also think the ASX dividend share can deliver capital growth for shareholders if the investment performance of its funds can turn around. It recently took a defensive positioning with its portfolios because of the perceived overvaluation of AI/tech businesses – a prudent move, in my eyes.

While being defensive has led to underperformance in 2025, I think the recent decline of tech valuations will have helped GQG's funds catch up.

Based on the latest quarterly dividend, the GQG share price is currently trading at less than 7x its distributable annualised net profit, which seems cheap, particularly if it can deliver stronger investment performance/stabilise the funds under management (FUM) outflows.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of my favourites for ASX dividend shares, boasting a large yield due to its track record of consistently delivering and regularly growing dividends. It has grown its annual dividend almost every year in the last several years, aside from one year (FY24) when it maintained its payout.

The company has 126 stores, with 116 in Australia and 10 in New Zealand. It claims to be the market leader in a growth sector. Its products are focused on DIY grooming, personal care, hair and beauty appliances for men and women, with a specialisation in premium products.

The ASX dividend share increased its payout to 10.3 cents in FY25, which translates into a grossed-up dividend yield of 10.1%, including the franking credits. If it hikes its dividend slightly to 10.4 cents in FY26, that'd be a grossed-up dividend yield of 10.25%.

I'm optimistic the company can grow its profits further with the growth of its own brand (called Transform-U), additional exclusive agreements with new shaver brands, more stores, and the potential to increase margins as it becomes larger.

According to the estimates on CMC Markets, the business is trading at 12x FY26's forecast earnings.

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The business currently operates 125 Shaver Shop stores across Australia and New Zealand, in addition to its websites.

It says it offers customers a wide range of quality brands, at competitive prices, supported by "excellent staff product knowledge". The business sources products from major manufacturers. Its specialist knowledge and strong track record in the personal grooming segment enable it to negotiate exclusive products with suppliers.

The company's core product range includes male and female hair removal products, such as electric shavers, clippers, trimmers, and wet shave items. It also sells items in the categories of oral care, hair care, massage, air treatment, and beauty.

ASX dividend stock credentials

Shaver Shop has delivered investors a very reliable dividend over the last several years.

It increased its dividend each year between FY17 and FY23. The business then maintained its annual dividend per share at 10.2 cents in FY24. It hiked its payout to 10.3 cents per share in FY25.

There are plenty of ASX stocks that have cut their dividend in recent years, including retailers. Shaver Shop, on the other hand, has managed to provide investors with resilience.

According to the forecast on CMC Markets, Shaver Shop is projected to pay an annual dividend of 10.5 cents per share in FY26. That translates into a cash dividend yield of 7.4% and a grossed-up dividend yield of 10.6%, including franking credits.

The business doesn't pay a monthly dividend, so I think it's better to consider it an annual goal and then divide it by 12.

For an investor to generate $100 of monthly income, we're talking about an annual goal of $1,200 cash. This means investors would need to own 11,429 Shaver Shop shares.  

But, if we were to include the franking credits as part of the passive income goal, an investor would need only 8,000 Shaver Shop shares.

Why the outlook is positive

With a dividend yield that large, it doesn't need to deliver huge capital growth to deliver pleasing overall returns.

The forecast on CMC Markets suggests that the business could increase its dividend per share to 11.6 cents again in FY27. It's also projected to deliver earnings per share (EPS) growth of 11.7 cents in FY26 (a slight increase) and then deliver 12.8 cents of EPS in FY27.

That means it's only trading at 12x FY26's estimated earnings and 11x FY27's estimated earnings.

The ASX stock can grow earnings through several strategies, including opening more stores, collaborating with additional brands, expanding its own private brand (Transform-U), and increasing online sales.

Overall, I think it has a promising future for both earnings growth and good dividends.

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Any business that pays a dividend is capable of paying a pleasing dividend yield. But, not many are likely to deliver a double-digit dividend yield in the next few years.

If an ASX dividend share has a relatively high dividend payout ratio and a relatively low price/earnings (P/E) ratio, then it can provide significant passive income in yield terms.

The business I'll highlight is Shaver Shop Group Ltd (ASX: SSG).

It sells a wide range of male and female personal grooming products across more than 120 stores in Australia and New Zealand. It sells products such as electric shavers, clippers, trimmers, and wet shave items, as well as oral care, hair care, massage, air treatment, and beauty categories.

The ASX dividend share's impressive payout history

The Shaver Shop has been paying shareholders a dividend for several years. It has increased its dividend every year since 2017, except for the year it maintained the annual dividend in FY24.

Not many businesses have increased their dividend that many times in the last seven years, yet this retailer has.

Most businesses with a high dividend yield haven't delivered that level of consistency for investors. High-yielding ASX mining shares and ASX retail shares tend to be more cyclical in their payouts.

Dividends are not guaranteed, but the business is projected to deliver further dividend growth.

Strong dividend yield

According to the forecast on CMC Markets, the business is projected to pay an annual dividend of 10.5 cents per share in FY26 and then 11.6 cents per share in the 2027 financial year.

At the time of writing, the Shaver Shop share price could pay a grossed-up dividend yield of more than 11%, including franking credits.

That's a huge yield in anyone's book, and it's clear to me the ASX dividend share could continue growing earnings over time because of a couple of key initiatives including exclusive products from shaving brands and the launch of its own private brand, which I'll cover in more detail below.

Profit growth expected

The forecasts on CMC Markets suggest the business could deliver earnings per share (EPS) of 11.7 cents in FY26 and 12.8 cents in FY27.

Shaver Shop claims to offer customers a wide range of quality brands at competitive prices, backed by excellent staff and product knowledge. Its specialist expertise and track record in the personal grooming segment enable it to negotiate exclusive products with suppliers. That gives customers a great reason to shop at the company's stores (or website).

The business also launched its own private brand called Transform-U in October, and it's performing strongly. The idea is to expand its current range (with features and price points), leverage its knowledge of customers, and meet customer demands.

I think this ASX dividend share is underrated for the shareholder returns it could deliver in the next couple of years.

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With how much the share market has risen over the last 12 months, it's becoming increasingly challenging to find businesses with big dividends. If the share price of a business increases by 10%, then the yield is reduced by 10%. For example, if a business had a 5% dividend yield and the share price jumped 10% in a week, the yield on offer would become approximately 4.5%.

If I were looking to find the ASX dividend shares with the highest dividend yields on offer, the two below would be among the top contenders on my list.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leading retailer of hair removal items in Australia and New Zealand. It sells items like electric shavers, clippers, trimmers, and wet shave items. The company has a number of exclude products with certain brands, and it also has a growing private brand called Transform-U.

In the FY25 result, the ASX dividend share generated 11.5 cents of earnings per share (EPS) and paid an annual dividend per share of 10.3 cents (an increase of 1%). At the time of writing, that means the Shaver Shop share price is valued at a price-earnings (P/E) ratio of around 12, and it has a grossed-up dividend yield of 10.4%, including franking credits.

The business has maintained or increased its dividend every year since it started paying one in 2017, suggesting it has a resilient history.

Sales started positively in FY26, with a 2.7% year-over-year increase in the period to 21 August 2025. Sales growth is a key driver of profit growth over the long term. I think the start of FY26 bodes well for a dividend increase in FY26.

Store network growth, along with the addition of more exclusive brands and private brand expansion, could be the key to further dividend growth in the next few years.

Accent Group Ltd (ASX: AX1)

Accent is a major footwear retailer in Australia – it owns a number of brands, including The Athlete's Foot, Stylerunner, Platypus, and Nude Lucy. The business acts as the local distributor/retailer for various global brands, including Hoka, Herschel, Vans, Ugg, Dr Martens, Lacoste, and Dickies.

While recent times have been challenging for retailers, I think this could be the right time to pounce on Accent because of the potential for earnings to bounce back following RBA rate cuts and a slowdown in the ASX dividend share's cost growth.

The company appears cheap to me due to its significant decline and the forward earnings multiple it's trading at. At the time of writing, the Accent share price has dropped by more than 40% this year, making it look much better value to me.

I'm excited about the company's plan to open dozens of Sports Direct stores in the next several years, given the number of additional global brands it can sell and how much these stores could contribute to earnings.

At the current Accent share price, it's valued at under 13 times FY26's estimated earnings, with a possible FY26 grossed-up dividend yield of 8.4%, including franking credits, according to CommSec's forecasts.

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