I had a virtual tie between two investments when it came to my largest source of dividends.

If we include the value of franking credits, the clear winner would be Plato Income Maximiser Ltd (ASX: PL8). Plato is a listed investment company (LIC) which I've written about a few times here at the Fool. It holds a portfolio of mature dividend-paying ASX blue chips, and pays large, fully franked dividends every single month. This makes it a wonderful source of passive income.

However, if we don't include franking credits, my largest passive income payer is actually an exchange-traded fund (ETF). Not an ASX ETF, though, this one hails from the United States of America.

It is none other than the Schwab US Dividend Equity ETF (NYSE: SCHD).

Why this US dividend ETF is my top passive income stock

This is a relatively new investment for me, but one I have been enthusiastically buying up over the past year or two. This is already, if you would pardon the pun, paying dividends.

The Schwab US Dividend Equity ETF is a fund that holds around 100 US stocks within its underlying portfolio. These stocks are selected based not only on their current dividend yields, but also on whether their ability to keep paying those dividends is sustainable. It can be thought of as a 'dividend growth ETF'.

These passive income stocks range from Coca-Cola Co, Chevron and Altria to PepsiCo, Texas Instruments and Lockheed Martin. Other prominent holdings include Ford Motor Co, UPS and Kleenex-owner Kimberly-Clark.

I like this dividend-focused ETF because of its impressive track record.

SCHD ETF has increased its annual dividend payments (which are paid out quarterly) every year for 13 years in a row. Those dividend increases have averaged 10.87% per annum over the past five years. Despite this impressive growth, the ETF trades on a bulky 3.7% trailing dividend yield today.

That's all while charging a management fee of 0.06% per annum, which is minuscule by ASX standards.

Given I'm not exactly approaching retirement age, I think this dividend-focused ETF is a great long-term investment.  I am hoping, and expecting, to enjoy an even larger stream of passive income from it in the years ahead. Let's see how I go.

The post Meet my number 1 passive income investment appeared first on The Motley Fool Australia.

But even so, I still own quite a few shares that pay meaningful dividend income every year. As it happens, most of these investments have also delivered meaningful capital growth. Today, let's discuss the biggest dividend payers in my personal portfolio.

The three biggest dividend payers in my ASX share portfolio

MFF Capital Investments Ltd (ASX: MFF)

First up is the listed investment company (LIC), MFF Capital. MFF, like most LICs, invests in an underlying portfolio of shares. In this case, it is mostly American stocks. This LIC is run by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris McKay. I like Mackay's Buffett-esque habit of buying high-quality companies at decent prices, and holding them for as long as possible.

Some of MFF's entrenched tenants include Mastercard, Visa, Amazon and Bank of America.

What's great about MFF is that it pays a strong, fully franked and rising dividend, despite its low-yield portfolio. Between 2021 and 2024, the company raised its annual (fully franked) payouts from 6.5 cents to 13 cents per share. Today, the company trades with a dividend yield of just under 3.4%, although I am lucky to have a yield-on-cost far higher than that. As such, MFF is one of the largest dividend payers in my ASX portfolio today.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Next up, we have an entrant in this exchange-traded fund (ETF) from popular provider Vanguard. The Vanguard Australian Small Companies ETF. This index fund tracks around 170 shares from the smaller end of the ASX spectrum. I find it complements a classic index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) that I also hold rather well.

It might not seem like it, but this ETF has paid me some massive dividends in recent years. When this ETF pays out its next dividend distribution on 16 July later this month, investors will have enjoyed a total of $5.37 in dividend distributions per unit. At the current VSO price of $68.40, this equates to a monstrous yield of 7.85%.

Schwab US Dividend Equity ETF (NYSE: SCHD)

Finally, a US-based ETF rounds out my portfolio's most lucrative dividend stocks. The Schwab US Dividend Equity ETF is a fund that holds a large portfolio of US stocks that all demonstrate reliable and rising dividend income potential. It holds a range of shares in this endeavour, including Texas Instruments, Chevron, PepsiCo, Altria and Coca-Cola.

Since SCHD ETF tends to hold only stocks that raise their dividends like clockwork, it can offer the same to its investors. I've only owned this ETF for a year or so, but already, my dividend income has risen meaningfully. Today, thanks in part to its dividends coming in US dollars, it is a major, and welcome, income payer in my portfolio.

The post Here are the 3 biggest dividend payers in my ASX stock portfolio today appeared first on The Motley Fool Australia.

Most of my 2025 buying has been on the other side of the Pacific. The US markets were (understandably) far harder hit than the ASX was in the Trump tariff tantrum that the markets went through last month. That made buying US stocks far more compelling than shopping on our local market. At least for this investor. So here are two US stocks that I've been buying in 2025 to date.

2 US stocks I've been buying in 2025

US stock 1: Alphabet Inc (NASDAQ: GOOGL)

First up is a company we'd all be familiar with – Google-owner Alphabet. I've long admired and owned Alphabet stock for its dominance in the global search space. It's an incredible thing to be a leading provider of advertising services in almost every country in the world. Yet that's the moat that Alphabet offers investors.

Sure, there are questions about its future dominance thanks to the rise of artificial intelligence (AI). Yet I believe that Alphabet's own AI platform, Gemini, is among the best on the market and will help the company bridge the jump to the future.

Additionally, Alphabet owns other popular businesses like YouTube and its autonomous driving division, Waymo. With a price-to-earnings (P/E) ratio under 20, I think Alphabet is one of the most attractive buys on any market right now.

2: Schwab US Dividend Equity ETF (NYSE: SCHD)

Next, we have an exchange-traded fund (ETF) in the Schwab US Dividend Equity ETF. SCHD is one of the most exciting ETFs on the US markets, in my view. It holds a range of US stocks selected for their dividend growth potential. These include famous names such as Coca-Cola Co, Home Depot, Chevron, and Altria Group.

SCHD's methodology has allowed it to increase its annual dividend distributions for the past 13 years in a row. These increases have averaged more than 11% per annum over the past five and ten years.

Last month, investors had the opportunity to buy SCHD units at some of the lowest prices we've seen in years. I was happy to seize this opportunity to buy more of this quality ETF.

The post I've been buying these 2 US stocks in 2025. Here's why appeared first on The Motley Fool Australia.

Even if you're not seeking to maximise your dividend income today, chances are you are hoping that your ASX share portfolio will one day let you retire comfortably by providing you with a stream of (preferably fully franked) passive dividend income.

That's certainly the case with my own stock portfolio.

I've been investing in ASX shares for many years now, and have been fortunate enough to build up a decent portfolio. I do receive some dividends from this portfolio, but not a meaningful stream.

Many of my largest investments are in companies that produce limited or no income. That includes Tesla, Amazon, Apple and Duolingo.

In fact, a recent analysis of my share portfolio informed me that its dividend yield is sitting at an unimpressive 1.9% or so.

This doesn't bother me. I would love to be in a position to retire tomorrow, but the reality is that I'm a long way from being there (sorry, you'll have to keep reading my articles for a while yet). As such, I am comfortable that my portfolio is (hopefully) structured to maximise overall returns rather than just a hefty stream of dividend income.

However, that doesn't mean I'm not trying to grow my dividend income meaningfully. As long as an investment offers a healthy growth runway, I will happily accept any dividend income it pays me.

In fact, I hope to earn $20,000 in annual dividend income from my ASX shares within the next few years.

Getting to $20,000 in annual passive income

If I wished, I could sell all of my investments, put the proceeds into bank stocks and other big dividend payers, and probably get close to $20k a year in dividend income today. However, I think I'll be far better off in the long run by sticking to my current strategy of investing in companies that offer growth as well as income.

To hit this $20k goal, I am investing in a handful of ASX shares that have demonstrated an ability to rapidly raise their dividend payments every year and look likely to be able to continue to do so.

Continued investment and reinvestment of dividends, alongside regular dividend increases from the companies themselves, is how I'll (eventually) get there.

The investments I've prioritised for this endeavour include Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Mastercard, Visa, Microsoft, Meta Platforms and Alphabet.

Let's use Soul Patts as an example. For one, this company has increased its annual dividend every year for almost 25 years. But over the past three financial years (FY22-24), its dividend has increased at an average compounded annual rate of 15.3%.

If this growth continues for the next three years and beyond, it will do a lot of the legwork in boosting my portfolio's income.

I have also recently established positions in American exchange-traded funds (ETFs) that prioritise selecting companies that have shown healthy dividend growth in the past. These include the Schwab US Dividend Equity ETF (NYSE: SCHD) and the iShares Core Dividend Growth ETF (NYSE: DGRO).

By continuously investing in these top-tier investments, I am hoping that my annual dividend income will continue to snowball and hit $20,000 per year in the next few years. I'll let you know how it goes.

The post Here's how I'm trying to build up my ASX share portfolio to earn $20,000 passive income each year appeared first on The Motley Fool Australia.