The risks are certainly higher, the lower down the market capitalisation list you go. Brand power isn't that strong and balance sheets haven't developed to their full potential.

WAM Microcap Ltd (ASX: WMI) is one of the funds that's focused on finding some of the most exciting opportunities at the small end of the market. The LIC recently highlighted two ASX small-cap shares in the portfolio that are exciting opportunities.

Duratec Ltd (ASX: DUR)

WAM described Duratec as a specialist infrastructure services company providing remediation, protection and energy services across civil, marine, mining and defence sectors.

The fund manager noted that Duratec's share price increased in March, supported by continued positive momentum after the release of the FY26 half-year result.

Duratec reported solid earnings in line with expectations, reinforcing investor confidence in its growth outlook and driving upward revisions to earnings forecasts.

Momentum was further supported by the award of a $45 million contract in Papau New Guinea (PNG) which was announced towards the end of March 2026. This highlights the ongoing expansion of the business.

WAM said the rising Duratec share price performance during the month reflected investor confidence in Duratec's earnings trajectory, project pipeline and execution capability, as well as the ASX small-cap share's exposure to resilient customer markets such as the defence sector.

Autosports Group Ltd (ASX: ASG)

WAM described Autosports as a motor vehicle dealership operator and provider of automotive services, focusing on the luxury and prestige segment.

The Autosports share price declined in March, reflecting market weakness across interest rate-sensitive stocks maid ongoing interest rate uncertainty.

On top of that, as part of the free trade agreement between Australia and the EU, which was signed on 24 March 2026, the luxury car tax threshold was increased for electric vehicles only, despite wider expectations that it would be completely abolished for all vehicles.

WAM believes that the March pullback does not reflect a deterioration in the company's strategic position.

The fund manager concluded its commentary on the ASX small-cap share by saying the team still view Autosports Group as well-placed to execute on strategic mergers and acquisitions in a highly fragmented industry.

The post 2 ASX small-cap shares to buy with big potential for returns appeared first on The Motley Fool Australia.

With inflation and interest rates seemingly on the rise, I think investors may be looking for names that can beat what interest rates bank savings accounts are likely to provide.

I want to highlight two ASX dividend shares that have never given their shareholders a dividend reduction, have a good track record of dividend increases, and have an incredible dividend yield.

WCM Global Growth Ltd (ASX: WQG)

WCM Global Growth is a listed investment company (LIC) that's managed by WCM, which is based in Laguna Beach, California. It's deliberately based a long way away from Wall Street (in New York).

This LIC targets a global portfolio of shares, which I think is a good strategy because there are thousands of opportunities to choose from.

WCM has whittled down its portfolio to just 20 to 40 stocks from that global hunting ground.

There are two factors that WCM wants to see particularly – improving economic moats and a corporate culture that supports the strengthening of those competitive advantages.

This strategy has allowed the ASX dividend share's portfolio to deliver a net return that's stronger than the global share market over the past year, three years and since the LIC's inception in June 2017.

WCM Global growth's net portfolio return has been an average of 15.8% per year since inception, allowing it to pay a growing dividend each year since it started paying one in 2019. Of course, past investment returns are not a guarantee of future returns.

The business has provided guidance that its quarterly dividend will continue growing every quarter until March 2027.

At the time of writing and according to guidance, the next four quarterly dividends to be declared will come to a grossed-up dividend yield of just over 8%, including franking credits. 

WAM Microcap Ltd (ASX: WMI)

It's my view that ASX small-cap shares are some of the most exciting investments to own because of their large growth potential and how early on in their growth journey we can invest in them.

For example, imagine there's a business that now makes $100 million in revenue. Wouldn't it have been great to have bought it when it was making just $10 million in revenue? We could look forward to owning it as it multiplied its sales by ten times.

Not every business is destined to grow 10x from its current scale, which is why I think it could be smart to leave the investing to a seasoned team of small-cap fund managers working full-time that have performed very well over the long-term.

Between inception in June 2017 to February 2026, the WAM Microcap portfolio has returned an average of 15.4% per year (before fees, expenses and taxes), outperforming the small-cap benchmark by 7% per year in that time.

That strength has allowed the ASX dividend share to increase its annual payout every year except FY24, going back to FY18 when it started paying a dividend.

Recent dividend increases have been small, but I think any growth is very appealing given it has such a large dividend yield. At the time of writing, the FY26 grossed-up dividend yield is guided to be around 10.2%, including franking credits.

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Some businesses are able to provide a high dividend yield because of a mixture of a relatively low price-earnings (P/E) ratio and a generous dividend payout ratio.

I'd put listed investment companies (LICs) into a somewhat separate category of ASX dividend stocks because they generate profits differently from other businesses.

Instead of selling goods or services, a LIC makes money by generating returns by investing in shares. LICs can then build up accounting profits, paying out a portion each year and retaining some of the gains (with a profit reserve in accounting terms) for when markets aren't performing.

The LIC I want to highlight is WAM Microcap Ltd (ASX: WMI). I think it's a strong ASX dividend stock pick for three reasons.

Impressive investment returns

A key element of LIC's success has been its focus on buying "the most exciting undervalued growth opportunities" in the Australian microcap market.

ASX small-cap shares can deliver great returns because of how early on in their growth journey they are. It's usually much easier for a business to double its revenue from $10 million to $20 million than it is to go from $1 billion to $2 billion.

WAM Microcap is very effective at generating returns thanks to its investment style and the size of the businesses it deals with. Between inception in June 2017 and February 2026, the portfolio return was an average of 15.4% per year, outperforming the small-cap benchmark by around 7% per year, before fees, expenses and taxes.

The WAM strategy is to invest in growing businesses where there's a catalyst that could send the share price higher.

That level of return means the ASX dividend stock is capable of delivering a large dividend and capital growth for the LIC.

Large and growing dividend yield

The LIC has been steadily growing its annual payout each year since FY18 – the only year it hasn't increased its payout was FY24, when it was maintained at 10.5 cents per share.

In FY26, the LIC is expecting to increase its annual payout by 1% to 10.7 cents per share.

Therefore, the ASX dividend stock could provide a grossed-up dividend yield of around 10.25%, including franking credits, at the time of writing.

That's a great starting dividend yield, in my view, and it could continue to grow.

Sizeable profit reserve

One of the key reasons WAM Microcap can be such a stable dividend payer is that it has built up a sizeable profit reserve to pay future dividends.

At 27 February 2026, it had built up a profit reserve of 55.4 cents per share. That means it has the accounting profits to pay around five years of dividends at the current level, even if it didn't make any more profit in that time.

I think this ASX dividend stock is a very appealing business, and it looks like a good time to buy after dropping 13% since mid-January 2026.

The post This ASX dividend stock has a 10% yield and I think it's a buy appeared first on The Motley Fool Australia.

With how the central bank interest rate in Australia has increased, I think it's fair to say that Aussie investors may want a higher dividend yield than last year. Savings accounts are now offering a noticeably better interest rate.

So, with that in mind, I'm going to outline two ASX dividend shares with very high dividend yields and the potential to deliver capital growth.

WAM Microcap Ltd (ASX: WMI)

One of the biggest advantages of a listed investment company (LIC) structure is that a company's board of directors can set the size of dividends it wants, so LICs can smooth out dividend payments, even during volatility.

WAM Microcap has grown or maintained its annual dividend per share each year since it first paid one in FY18. FY24 has been the only year that it has maintained the payout.

The company is expecting to increase its payout by 1% in FY26 to 10.7 cents per share. That translates into a grossed-up dividend yield of 10.25%, including franking credits. That's obviously an excellent level of passive income.

WAM Microcap has a profit reserve of 55.4 cents per share, meaning it has the accounting profits to pay the dividend for around five years at the current level.

How does this ASX dividend share make profit? It aims to invest and make returns with the most exciting undervalued growth opportunities in the ASX small-cap share space.

At the end of February 2026, the LIC had generated a portfolio performance of an average of 15.4% per year since inception in June 2017, before fees, expenses and taxes. That was more than 7% per year better than its small-cap benchmark. Small caps can deliver good returns because they are often under-researched and earlier on in their growth journey.

Some of its largest investments at the end of February 2026 were Tuas Ltd (ASX: TUA), Gentrack Group Ltd (ASX: GTK), Beacon Lighting Group Ltd (ASX: BLX), and Autosports Group Ltd (ASX: ASG).

After falling close to 10% during March, this could be a good time to consider investing in the business.

Charter Hall Long Wale REIT (ASX: CLW)

The other high-yielding ASX dividend share I want to highlight is this real estate investment trust (REIT) with a very diversified portfolio across multiple sectors.

Diversification is one of the biggest benefits of this ASX dividend share – plenty of other REITs are focused on just one sector, like shopping centres, office buildings, or industrial property.

This REIT is invested across numerous areas, including pubs and hotels, service stations, data centres, telecommunications exchanges, distribution centres, waste and recycling facilities, Bunnings properties, and so on.

One of the main advantages of this REIT is that its rental contracts are very long term, providing income stability and security for investors who want operating earnings to be less bumpy than, say, a miner.

Pleasingly, the business has rental indexation built into its portfolio, with properties either on fixed annual increases or the increases are linked to inflation.

It's expecting to grow its FY26 distribution by 2% to 25.5 cents per security in FY26, which translates into a distribution yield of 7.4%, which I think is an appealing starting point with further rental growth expected.

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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.

The post How to invest $10,000 to aim for a 15% dividend yield appeared first on The Motley Fool Australia.

The market may question how much long-term earnings growth certain companies in the tech sector can produce as AI develops further.

I'm optimistic that the following businesses can continue to provide positive investment returns and growing income.

Centuria Industrial REIT (ASX: CIP)

Industrial properties could be a smart move by investors looking for resilient income, given the importance of things like distribution centres and other logistics, refrigerated space and data centres.

This particular ASX dividend income stock owns a portfolio of industrial properties in high-demand areas, leading to low vacancy rates and stronger rental growth.

In the first half of FY26, the business reported that net operating income (NOI) grew 5.1%. Future rental growth looks compelling in the next several years with the portfolio under-rented by an average of around 20% – this can be reset as rental contracts come up for renewal.

It's expecting to grow its FY26 funds from operations (FFO – rental profit) per security by up to 6% and the distribution per security is guided to increase by 3% to 16.8 cents. I think the business looks like a solid pick for resilient operating profit and distributions – its FY26 distribution equates to a 5.2% distribution yield, at the time of writing.

It looks cheap, with the unit price trading significantly below the net tangible assets (NTA) per unit of $3.95 as at 31 December 2025.

WAM Microcap Ltd (ASX: WMI)

This ASX dividend income stock is a listed investment company (LIC) that aims to make investment profits by investing in small-cap ASX shares.

The portfolio is not heavily exposed to the tech sector. In-fact, at the end of January 2026, only 15% of the portfolio was invested in the IT sector.

I view it as significantly diversified thanks to the fact that it's invested in dozens of different businesses. Industrials (20.6%), consumer discretionary (18.7%) and financials (17.4%) all had a larger weighting in the portfolio.

But, this is not just a diversification play – it has performed admirably for investors. The portfolio has returned an average of 16.2% per year since June 2017, before fees, expenses and taxes. This has been enough to fund good dividends.

Pleasingly, it has increased its annual dividend every year between FY18 and FY25, aside from FY24 when it maintained the payout.

It's expecting to grow its annual payout in FY26 slightly to 10.7 cents per share, translating into a potential grossed-up dividend yield of 9.4%, including franking credits.

The post 2 star ASX dividend income stocks for March 2026 appeared first on The Motley Fool Australia.

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 dividend yield is an appealing factor of the business, but there's more to it than just huge payouts.

WAM Microcap is run by the fund manager Wilson Asset Management. It is already been around for nine years, and I'm expecting it to in my portfolio for many years to come for a few reasons.

Big dividend yield

Let's start by acknowledging how big the dividend yield is.

Pleasingly, the business grew its regular annual dividend per share each year between FY18 and FY23. It maintained the payout in FY24 and then increased dividend per share to 10.6 cents in FY25.

In other words, it has delivered a reliable level of dividends over the last several years, as well as a few special dividends.

At the time of writing, the FY25 payout translates into a dividend yield of 9.1%, including franking credits.

It ticks the yield and reliability boxes, but there are two other elements that are attractive.

Small ASX shares can make big returns

A LIC's job is to make investment returns for shareholders. Those returns can be generated in a variety of different ways, from various sized businesses.

The WAM Microcap investment team look for opportunities at the small end of the ASX share market, which comes with two key advantages.

Firstly, those stocks are much earlier on in their growth journey compared to the well-known ASX shares. They may have a much better earnings growth rate than their larger counterparts. Rising earnings is a key driver of higher share prices.

Second, small businesses are not as widely researched by investors as larger businesses. It's more likely that a small business will be overlooked and undervalued.

I think it's the above factors that have helped the WAM Microcap deliver an average return per year of 16.7% since inception in June 2017 (before fees, expenses and taxes). This level of return helps fund the large yield.

Diversification

WAM Microcap is not a highly concentrated portfolio of just a few names. It's invested in a variety of sectors, with dozens of stocks spread across areas like industrials, consumer discretionary, financials and IT. That gives it good diversification.

Some of its biggest holdings at the end of December 2025 were Autosports Group Ltd (ASX: ASG), Baby Bunting Group Ltd (ASX: BBN), FINEOS Corporation Holdings PLC (ASX: FCL), Generation Development Group Ltd (ASX: GDG), Kelsian Group Ltd (ASX: KLS) and Tuas Ltd (ASX: TUA).

While small caps can be volatile, it's not exposed too much to one business or one sector. It's a compelling investment for yield investors, in my opinion.

The post This 9% yield is one I'm comfortable holding for the long term appeared first on The Motley Fool Australia.

ASX stocks can provide both capital growth and dividends (passive income). That sounds good to me!

If someone were to start investing at the age of 25, they could grow their wealth enormously by the time they wanted to retire.

Time will tell what the usual retirement age will be in 40 or so years. It could be 65, 70 or even older. But, I'm going to show how a 25-year-old investor could grow their wealth over the next four decades.

Compounding potential

Every household's finances are different, so I can't say for sure what level of savings someone would be able to unlock for investing. What I do know, is that we want to get to a place where we are spending less than our income so we have money left over to invest.

When we're able to create savings most months (or every month), then we can put that money towards investing into the ASX stock market.

Investing in shares is simple, comes with a lot less paperwork and costs than property, doesn't require debt and can deliver great returns in we invest in the right area.

Over the ultra-long-term, shares have returned an average of around 10%. At that rate, the value of the shares would double in just eight years.

Let's imagine a 25-year-old was able to invest $1,250 each month on average into ASX stocks. That would become $6.64 million after 40 years, with around $6 million of that being generated by returns and the rest being from the monthly deposits.

I'm not sure what portfolio size will be needed to reach a comfortable retirement, but $6 million may be more than enough.

Someone may not want to work as long as that.

After 30 years of following that strategy, the portfolio would be worth $2.47 million.

After 20 years it'd be worth $859,000, which may not quite be enough.

Therefore, it could take less than 30 years for someone to build a substantial wealth fund.

Which ASX stocks to invest in?

The easiest way to invest could be exchange-traded funds (ETFs) that provide diversified exposure to the share market such as BetaShares Australia 200 ETF (ASX: A200) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

Listed investment companies (LIC) such as Australian Foundation Investment Co Ltd (ASX: AFI), WAM Microcap Ltd (ASX: WMI) and L1 Long Short Fund Ltd (ASX: LSF) could be compelling options.

Or, some of country's best ASX growth shares such as Temple & Webster Group Ltd (ASX: TPW), Tuas Ltd (ASX: TUA) or TechnologyOne Ltd (ASX: TNE) could be compelling picks.

The post If a 25-year-old invests $1,250 a month in ASX stocks, here's what they could have by retirement appeared first on The Motley Fool Australia.

One business is from the WAM Leaders Ltd (ASX: WLE) portfolio, which is a listed investment company (LIC) that focuses on the larger companies on the ASX. The other company is from the WAM Microcap Ltd (ASX: WMI) portfolio.

Let's get into those ideas. While they may not be some of the most well-known businesses on the ASX, they may be just as capable of delivering good returns for investors, if not more because the market isn't paying them a lot of attention.  

Whitehaven Coal Ltd (ASX: WHC)

WAM described Whitehaven Coal as a leading Australian coal producer with "high-quality assets and a robust balance sheet".

The investment team in charge of WAM Leaders revealed that the LIC recently increased its holding of Whitehaven Coal shares as coal prices began to "firm" after bottoming earlier in the year.

The ASX blue-chip share continues to deliver sound operational results despite a challenging backdrop and is executing cost-reducing initiatives with increased volumes at Blackwater and Daunia mines expected to "drive unit cost reductions from FY27".

The fund manager also noted that Whitehaven Coal maintains strong capital management flexibility, supporting shareholder returns through share buybacks and dividends.

Artrya Ltd (ASX: AYA)

WAM said that Artrya is a medical technology company focused on the detection and management of coronary artery disease and utilises artificial intelligence (A) to deliver accurate and non-invasive diagnoses in emergency and primary care settings.

The fund manager noted that the Artrya share price increased in December after Artrya announced it had secured its second US commercial customer, signing a three-year agreement with Northeast Georgia Health System (NGHS), one of its US foundation partners.

The agreement has a minimum value of US$0.3 million for the Salix Coronary Anatomy platform, with additional upside from per-scan fees for add-on modules.

It also supports Artrya's US growth strategy by moving a foundation partner into a paying customer and creating a reference site for further hospital contract wins.

Importantly, the Salix platform is expected to be rolled out across NGHS' five hospitals and broader network, signalling scope for wider adoption beyond an initial implementation.

WAM said Artrya also pointed to its Atlanta-based customer success team as a key enabler of smooth deployment and scalable customer onboarding as it grows in the US. The approval of Artrya's Heartflow Analysis module and additional customer contract wins are key near-term catalysts.

Both of these ASX shares could be pleasing opportunities at the current share prices.

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Fund manager Wilson Asset Management has outlined two businesses in the WAM Microcap Ltd (ASX: WMI) portfolio that could be good performers in the coming years.

WAM Microcap, a listed investment company (LIC), is looking for the "most exciting undervalued growth opportunities in the Australian micro-cap market".

Let's take a look at which small businesses WAM likes.

Stealth Group Holdings Ltd (ASX: SGI)

The fund manager described Stealth Group Holdings as a diversified, multi-channel distribution business that supplies industrial, hardware, safety and consumer products to trade and retail customers across Australia.

During November 2025, the Stealth Group Holdings share price increased sharply (up 60%) after the company announced the acquisition of Hardware & Building Traders (HBT), Australia's largest privately-owned hardware and industrial buying group.

The acquisition significantly increased the ASX small-cap stock's scale, expanding distribution points from 32 to more than 1,200 independent retail and trade stores in Australia, raising purchasing volume by approximately $700 million and adding around 490 suppliers in the ecosystem.

The company increased its FY28 targets to more than $500 million in sales and provided profit margin targets that imply up to $40 million in net profit after tax (NPAT). The fund manager believes these targets are "relatively conservative" in the context of the "significant synergy potential and the company's ability to undertake further acquisitions over time, none of which are included in these targets".

Wilson Asset Management concluded on the ASX small-cap stock:

Whilst the share price increased by more than 60% over the month as investors priced in stronger medium-term growth and returns from the enlarged platform, we continue to see substantial re-rating potential.

EML Payments Ltd (ASX: EML)

WAM described EML Payments as a global payments solutions company that powers business processes "seamlessly for growth and exceptional customer experiences".

During the month, the EML Payments share price fell 11% after the company revealed operating trends that were weaker than expected at its annual general meeting (AGM).

The company's FY26 first quarter update revealed a decline of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of approximately 42% year over year, as well as a small decline in revenue. But, the company did reaffirm its full-year EBITDA guidance.

WAM noted that the update was interpreted by the market as a "weak" trading result, with soft top-line momentum.

Why does the fund manager like the ASX small-cap stock, considering these headwinds? WAM said:

Led by Chief Executive Officer Anthony Hynes, we continue to have confidence in his ability to execute on the turnaround and drive a re-rating of the share price.

The EML share price is now down around 30% in the past six months, making it a lot cheaper for interested investors.

The post 2 ASX small-cap stocks this fund manager thinks are buys appeared first on The Motley Fool Australia.

A dividend yield is decided by the dividend payment compared to the share price. A 5% dividend yield can come from any sized business.

The three businesses I'm going to talk about are relatively small but can offer large and resilient dividend payouts.

Rivco Australia Ltd (ASX: RIV)

Rivco Australia, previously known as Duxton Water, owns a portfolio of water entitlements. These entitlements are vital for the Australian agricultural sector, enabling Rivco to generate lease income on either short or long-term contracts. Over time, the company can benefit from a rise in the value of water entitlements, which may also herald an increase in the potential lease income for the ASX dividend stock.

This business is fairly small on the ASX, with a market capitalisation of $228 million at the time of writing, according to the ASX.

Impressively, the business has increased its annual dividend per share every six months for the last several years. Its latest two payments come to a grossed-up dividend yield of 7.1%, including franking credits.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is a listed investment company (LIC) focused on investing in the smallest and most exciting companies which could deliver good investment returns.

The investment strategy has clearly worked well because at 31 October 2025, the LIC had delivered an average return per year of 17.6%, before fees, expenses and taxes since inception.

That level of investment return, which is not guaranteed to continue, has enabled the ASX dividend stock to deliver large and growing dividends over its lifetime.

In FY25, it paid shareholders a total annual dividend of 10.6 cents per share, translating into a grossed-up dividend yield of 9.5%, including franking credits.

WAM Microcap has a market capitalisation of $451 million according to the ASX, at the time of writing.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that helps give Australians exposure to different sectors of the farming world, such as almonds, cattle, macadamias, vineyards and cropping.

The ASX dividend stock has increased its distribution in a majority of the years of the last decade, with no cuts. It's expecting to maintain its distribution at 11.73 cents per unit in FY26, translating into a forward distribution yield of 6%.

According to the ASX, at the time of writing, Rural Funds has a market capitalisation of $766 million.

With the RBA cash rate lower at the end of this year than the start, I believe the outlook for real estate investments is solid, particularly with Rural Funds' expectations of larger rental income in the coming years.

The post 3 little-known ASX dividend stocks to buy for income appeared first on The Motley Fool Australia.

The investment team of the listed investment company (LIC) WAM Microcap Ltd (ASX: WMI) are looking for the "most exciting undervalued growth opportunities in the Australian micro-cap market".

Two businesses in the WAM Microcap portfolio at the end of October were a communications infrastructure and services provider, and a property developer and investor. Let's get into what could make these compelling investments.

GenusPlus Group Ltd (ASX: GNP)

WAM described GenusPlus as a national power and communications infrastructure contractor. In October, the GenusPlus share price climbed by more than 14% amid consecutive contract wins.

The company won additional Western Power packages on the Clean Energy Link – North (CELN) program and related underground power works, with a total value of approximately $50 million.

The ASX growth share followed this up with an approximate $60 million decarbonisation contract with Fortescue Ltd (ASX: FMG) at Christmas Creek for 30km of overhead power distribution infrastructure, along with the construction of fast-charger and pit power facilities at Eliwana and Flying Fish.

WAM said the cadence and scale of these awards reinforced revenue visibility and highlighted GenusPlus Group's positioning on Western Australia's network upgrade cycle, which supported sentiment through the month. The fund manager concluded its thoughts on the business with the following:

Longer term, we believe the expanding backlog which now includes the major CELN network will underpin earnings growth across transmission, distribution and resources.

Cedar Woods Properties Ltd (ASX: CWP)

WAM described Cedar Woods Properties as a property developer and investor primarily interested in urban land subdivision and built form development for residential, commercial, and retail purposes.

The fund manager stated that the ASX growth share recently reported a strong quarter for the three months to September 2025. This reflected "excellent execution, macroeconomic tailwinds and the ongoing structural housing shortage in Australia".

Property settlement volumes rose 17% compared to the same quarter in 2024, while management upgraded the FY26 net profit growth guidance from 10% to 15%.

WAM likes that the company has "high earnings visibility", with over 90% of FY26 revenue already pre-sold – this is the most visibility it has had "in decades".

The fund manager then explained why it's optimistic about the ASX growth share for the future:

With approximately 9,400 lots, dwellings and office units across 35 projects in Queensland, Victoria, Western Australia and South Australia, we believe Cedar Woods Properties is well positioned to benefit from population growth, limited housing supply and supportive government policy that is expected to sustain demand over the medium term.

The post This fund manager is bullish on these ASX growth shares appeared first on The Motley Fool Australia.

A business can make a profit in a whole manner of different ways and that can be translated into passive income dollars in just the same way.

I own two of these businesses in my portfolio and I'm optimistic their dividends can continue to be pleasing in the coming years.

Rivco Australia Ltd (ASX: RIV)

Rivco Australia (previously known as Duxton Water) owns a portfolio of water entitlements, which can then be leased to irrigators on short-term or long-term contracts. The company can benefit from both the lease income and the potential increase in value of water entitlements.

Impressively, the little-known ASX dividend share has increased its half-yearly dividend every year since 2017, which is a longer dividend growth streak than most ASX blue-chip share.

The last two dividends translate into grossed-up dividend yield of around 7%, including franking credits, at the time of writing. I'm expecting further dividend growth for the foreseeable future, particularly if water entitlement prices increase.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is a listed investment company (LIC) that invests in small businesses with strong growth potential.

A fund manager can make investment returns from small shares or big shares. Arguably, it's easier to make larger returns from smaller stocks because they are earlier on in their growth journeys and they are less followed investments (so the price/earnings (P/E) ratio is lower than it could be).

The WAM Microcap portfolio returned an average of 17.3% per year between June 2017 and September 2025, before fees, taxes and expenses.

This strong return has funded large and rising dividends. Its FY25 dividends per share translate into a grossed-up dividend yield of around 9%, including franking credits, at the time of writing.

Service Stream Ltd (ASX: SSM)

This little-known ASX dividend share describes itself as a provider of essential network services, operating across all states and territories.

It works across a number of industries including power grids, the industrial and resources sector, telecommunications, gas, potable water and wastewater, defence, health, renewable, new energy, maritime, social housing, rail, roads and more.

Service Stream delivered a strong FY25, with revenue growth of 1.2%, operating profit (EBITDA) from operations growth of 13.1% and underlying net profit (NPAT-A) growth of 36.7%.

The growth helped them fund an annual dividend per share of 5.5 cents, which represented a year-over-year increase of 22.2%.

At the time of writing, that translates into a grossed-up dividend yield of 3.5%, including franking credits.

The company is expecting to achieve further growth in FY26, with an improvement in the quality of earnings across utility operations and strong levels of infrastructure investment. I think this bodes well for further dividend growth.

The post 3 little-known ASX dividend shares to buy for income appeared first on The Motley Fool Australia.

By sifting through hundreds of smaller names, investors can find hidden gems worth investing in.

In this article, we're going to look at two businesses that are in the portfolio of the listed investment company (LIC) WAM Microcap Ltd (ASX: WMI), which focuses on the smallest growing businesses on the ASX where the fund manager can see a catalyst that could send the share price higher.

While the following two businesses may not become the next Commonwealth Bank of Australia (ASX: CBA), the fund manager Wilson Asset Management is bullish on these ASX small-cap shares with their prospects.

Ai-Media Technologies Ltd (ASX: AIM)

WAM describes AI-Media Technologies as a business that provides the full suite of technology and services needed to accurately caption live broadcasts, in-venue displays and over-the-top (directly to the customer through the internet) content in multiple languages.

The fund manager noted that in September, the company benefited from utilising the annual general meeting (AGM) webcast to feature a live demonstration of LEXI Voice, an AI-powered, real-time multi-lingual voice translation solution.

On 26 September 2025, the ASX small-cap share released the chair and CEO addresses, which highlighted its pivot to a tech-led model and noted the adoption of the LEXI AI suite.

This followed the company's strong full-year results where management spelled out the continued shift towards technology product revenue and reiterated the long-term aspirational targets of $150 million in revenue and $60 million of operating profit (EBITDA) by FY29.

COG Financial Services Ltd (ASX: COG)

The other ASX small-cap share that the fund manager highlighted was COG Financial Services, which it described as Australia's largest aggregator of finance brokers and equipment leasing businesses.

WAM noted the company saw a positive rise gain in September largely due to contract wins and result-driven momentum.

In early September 2025, it announced the $40 million acquisition of EasiFleet, a salary packaging and novated leasing business.

The fund manager highlighted that the acquisition aligns with the company's growth plan being expanding the ASX small-cap share's scale and geographic reach in novated leasing, salary-packaged car leases arranged through employers, while adding complementary customer exposure across its existing brand portfolio.

The company has already been growing consistently in this segment, with FY25 revenue from novated leasing up 22% on the prior year. On top of that, the FY25 result remains a focus for investors after an updated result presentation was announced and fresh substantial holder filings suggested rising institutional investor interest.

WAM concluded about the ASX small-cap share:            

While cyclical factors have weighed on COG's recent earnings, we continue to see long-term upside as management executes a more focused strategy, with the annual general meeting on 6 November 2025 representing the next potential catalyst.

The post These ASX small-cap shares have BIG potential appeared first on The Motley Fool Australia.

Following earnings season in August, scores of ASX companies are paying out millions in dividends to shareholders.

Those participating in dividend reinvestment plans (DRPs) are receiving their new shares, typically on the same day that cash dividends are paid out.

If you'd like to receive any of the dividend payments below, you need to buy these ASX shares before their ex-dividend dates.

Each time a company announces its next dividend, investors have a typically short time period to invest anew or top up their holdings to maximise their dividend income.

Here at The Fool, we do not recommend buying shares in a company you have not researched just to get the next dividend payment.

Our stock analysts say the decision to invest should be much more considered and strategic than that, and based on fundamentals.

Many investors employ a dollar-cost averaging strategy on ex-dividend dates to reduce the average cost of their holdings over time.

These investors already own stock in the company.

They target the ex-dividend date for further purchasing because the share price tends to fall on the ex-dividend day, potentially providing an attractive buy-the-dip opportunity.

Here are 16 ASX shares going ex-dividend next week.

16 ASX shares with ex-dividend dates next week

The post 16 ASX shares going ex-dividend next week appeared first on The Motley Fool Australia.

The listed investment company (LIC) WAM Microcap Ltd (ASX: WMI) aims to look for the "most exciting undervalued growth opportunities in the Australian micro-cap market".

Of course, there's no guarantee that a small business will become a medium-sized one. But, I'd say it's easier for a small company to grow by 10% than it is for a $100 billion business.

Let's take a look at two ASX small-cap stocks that WAM highlighted in the WAM Microcap portfolio.

Qoria Ltd (ASX: QOR)

WAM describes Qoria, previously called Family Zone, as a business that develops cloud-based cybersecurity and child protection software for schools and families worldwide.

The Qoria share price jumped 20% in July thanks to its financial performance and strategic developments, according to the fund manager.

WAM noted the ASX small-cap stock reported growth of $29 million of annual recurring revenue (ARR) in the three months to 30 June 2025, meaning a 55% increase compared to the fourth quarter of FY24, assisting the 25% rise in total ARR to $145 million in the year.

The fund manager highlighted that Qoria's management increased FY26 guidance to 20% ARR growth, signalling "confidence in the ongoing expansion and market adoption of its cyber safety platform which provides strong visibility into future year revenues and operating leverage."

Plenti Group Ltd (ASX: PLT)

The other ASX small-cap stock that WAM pointed out was Plenti, a fintech platform that provides consumer and renewable energy loans digitally across personal, automotive, and sustainability lending.

This business recently reported a record quarter in the three months to 30 June 2025, with loan originations reaching $437 million, which represented a 44% increase year over year. The loan portfolio is close to $2.7 billion, a rise of 21% year over year.

The fund manager pointed out that Plenti has secured the management of the government-backed Western Australia residential battery scheme, an initiative that will "open new revenue channels and likely generate a steady stream of income through financing and rebate administration fees", according to the investment team.

WAM said the rapid development of a technology solution "showcased operational and technological capabilities, reinforcing the company's leadership in clean energy finance."

The fund manager noted that Plenti's automotive loan partnership with National Australia Bank Ltd (ASX: NAB) saw the daily origination rise by 110% on the prior quarter, showing ongoing success working with a major bank.

WAM believes rate cuts will provide further tailwinds. Yesterday, the RBA cut the cash rate by 25 basis points (0.25%) to 3.60%.  

The post 2 ASX small-cap stocks to buy with big growth potential appeared first on The Motley Fool Australia.

But how can we create that cash flow of investment income? Buying a property can require tens of thousands of dollars. It could take a long time to save that much.

The great thing about investing in ASX shares is that we don't need to save a ton to be able to start investing. In fact, some brokers allow us to start investing with as little as $500.

I wouldn't necessarily try to find something that has the biggest dividend yield around because those sorts of businesses don't typically have a reputation for long-term stability or continuous growth. There are lower-risk investments we can buy to start making ASX passive income for our portfolios.

Individual ASX shares

Australian companies are some of the most appealing businesses for dividends because of both the franking credits and the generous dividend payout ratios (to distribute those franking credits for shareholders).

I'd only want to invest in businesses that have a compelling long-term future, where earnings growth seems likely and that can assist dividend growth.

I'm thinking of businesses such as investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), property owner Centuria Industrial REIT (ASX: CIP), water entitlement owner Duxton Water Ltd (ASX: D2O), telco Telstra Group Ltd (ASX: TLS), funds management business GQG Partners Inc (ASX: GQG) and Kmart and Bunnings owner Wesfarmers Ltd (ASX: WES).

I think there's a very good chance of the above businesses growing their annual payouts regularly in the coming years.

Exchange-traded funds

Exchange-traded funds (ETFs) can be effective options for ASX passive income because of how they enable investors to buy a portfolio of businesses in just a single investment, which is a great tool for diversification.

If investors want a portfolio of large ASX shares then there are a couple of options. There's one that let Aussies invest in dozens of high-yielding ASX businesses – Vanguard Australian Shares High Yield ETF (ASX: VHY).

The Vanguard Australian Shares Index ETF (ASX: VAS) allows Aussies to invest in the S&P/ASX 300 Index (ASX: XKO), which includes those higher-yielding names too, such as Rio Tinto Ltd (ASX: RIO), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC). The VAS ETF also owns businesses better suited for capital growth.

There are other ETFs that can also provide a good dividend yield level, including Betashares FTSE 100 ETF (ASX: F100) and Betashares India Quality ETF (ASX: IIND), which provide exposure to the UK and India share markets, respectively.

Listed investment companies

One area of the share market that shouldn't be discounted for ASX passive income are listed investment companies (LICs), which enable us to invest in a company whose activity is making investments rather than selling products or services.

Part of the appeal of LICs is that they can utilise the profits of investment performance to pay a steady flow of dividends to investors.

The oldest and largest LIC – Australian Foundation Investment Co Ltd (ASX: AFI) – has been very consistent with its dividends this century.

Other LICs which appeal based on their dividend records include WAM Microcap Ltd (ASX: WMI), WCM Global Growth Ltd (ASX: WQG) and L1 Long Short Fund Ltd (ASX: LSF).

The post How to start generating ASX passive income with as little as $500 appeared first on The Motley Fool Australia.

WAM Microcap is a listed investment company (LIC). LICs can be appealing because of their ability to provide investors with diversification. Operating with a company structure allows the business to provide smoothed-out dividend payments for shareholders.

This particular LIC aims to invest in the most exciting, undervalued growth opportunities in the Australian microcap market.

Firstly, I'll talk about why WAM Microcap is in my portfolio and then I'll talk about the dividend yield.

The appeal of this ASX share

There are a lot of companies listed on the ASX and I'd say it's impossible for one person to follow them all. Additionally, there are some sectors/companies that aren't as easy to understand as others (though they can still be opportunities worth investing in). I don't want to miss out on those compelling stocks.

The WAM Microcap team are looking for opportunities at the small end of the ASX share market, which can make strong returns.

I think it's much easier for a small business to double in size than it is for an already-large business to double in size. Small businesses tend to be overlooked by many fund managers and analysts, meaning they can trade at good value too.

Between June 2017 and May 2025, the WAM Microcap portfolio has returned an average of 16.2% per year. That is the gross return before expenses, fees and taxes. Still, a very impressive return and large enough to fund a large payout and deliver a bit of capital growth over the longer-term. But, past performance is not a guarantee of future returns.

Large dividend yield

I think it makes sense for WAM Microcap to pay a large dividend yield because it can be more nimble and take meaningful positions (for its own portfolio) in small-cap stocks if the LIC remains small. Paying large dividends helps limit the size of the LIC, while also paying a large dividend yield.

The LIC is expecting to pay an annual dividend of 10.6 cents per share in FY25. At the current WAM Microcap share price, that translates into a fully franked dividend yield of 7.3% and a grossed-up dividend yield of 10.4%, including franking credits.

I like the underlying diversification this ASX share offers, as well as providing a large amount of dividend income. At the right time, I think it can be a very effective investment for Aussies want large dividend income and/or exposure to small-caps. It's currently trading at approximately its pre-tax net tangible assets (NTA), which I think is appealing in a falling interest rate environment.

The post This is the ASX share in my portfolio with the biggest dividend yield appeared first on The Motley Fool Australia.