Looking to build up some handy passive income from ASX shares in May?

Well, it’s the first of the month. There’s no time like the present.

So, here’s how I’d invest $1,000 in May – for starters – in two high-yielding S&P/ASX 200 Index (ASX: XJO) dividend stocks that both pay fully franked dividends.

Tapping into oil and gas for passive income

The first ASX 200 dividend share I’d buy to begin building my passive income stream is Woodside Energy Group Ltd (ASX: WDS).

Not only does the oil and gas stock deliver outsized dividends, but the Woodside share price has also widely outperformed the benchmark over the past year.

Fuelled by high energy prices, Woodside shares are up more than 9% over the past 12 months.

The ASX 200 is flat over that same period.

As for passive income, Woodside declared a record interim dividend and a record final dividend over the full year. Adding the interim dividend of $1.60 per share to the final dividend of $2.15 per share, Woodside’s full-year dividend payout comes out to $3.75 per share.

At the current share price of $34.13, this equates to a trailing yield of 11%, fully franked.

That’s a juicy yield. But the next ASX 200 dividend share I’d invest in for passive income offers an even bigger trailing yield.

Before we move on to that one, do take note that we are discussing trailing yields here. These are based on the payouts from the past 12 months.

Future dividend payments could be lower or higher, depending upon a range of company-specific and broader macroeconomic factors.

With that said…

Black gold shining brightly

Investing $1,000 for passive income in May, I’d have a hard time not buying shares of New Hope Corp Ltd (ASX: NHC).

Like Woodside, New Hope shares have outperformed the ASX 200 over the past 12 months, though by an even broader margin.

Over the past full year, the New Hope share price has rocketed 56%.

And remember, the ASX 200 is flat over this time period.

Passive income investors who’ve held shares over the past year will also be earning some truly outsized yields.

As with Woodside, New Hope paid out a record high 56 cents per share final dividend. The coal miner will pay a 40 cents per share interim dividend on Wednesday 3 May, having traded ex-dividend on 17 April.

Accounting for Wednesday’s pending dividend payment, New Hope will have delivered 96 cents per share in fully franked dividends over a 12-month period.

At the current share price of $5.43, that works out to a yield of 17.7%.

How much passive income will my $1,000 May investment yield

Working with the trailing yields and assuming I buy an equal number of Woodside and New Hope shares, my combined dividend yield for the two ASX 200 stocks works out to 14.4%.

That equates to a handy $144 in passive income each year, coupled with potential tax benefits and future share price gains, just from my $1,000 May investing plan.

Of course, I likely wouldn’t stop there.

There’s always June, after all. And July. And…

Well, you get the idea.

Happy passive income investing!

The post How I’d invest $1,000 in May to make easy passive income appeared first on The Motley Fool Australia.

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More reading

• Woodside share price in the green as Shell offloads stake in $30 billion JV gas project
• ASX 200 dividend stocks: Here’s a diamond in the rough yielding 18%!
• No savings at 30? I’d invest $3 a day in ASX shares to target a second income of $10,824 a year
• 5 things to watch on the ASX 200 on Friday
• 12 ASX dividend shares with yields over 10%. Are they too good to be true?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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