2 ASX blue-chip shares offering big dividend yields

ASX blue-chip shares are typically among the most stable and resilient businesses on the stock exchange, capable of providing a good dividend yield.

Having a great market position has usually come about because the business has (one of) the best offerings for customers, great brand power, and appealing economics (compared to peers).

Businesses in the blue-chip space can usually provide investors with a good dividend yield because of two key factors.

Firstly, they are not priced for a lot of growth – they are already very large companies – so the price-earnings (P/E) ratio is lower than a faster-growing business.

Secondly, they’re not investing significantly for growth, so they can be generous with the dividend payout ratio.

While they’re not 10% dividend yields, the below businesses have solid dividend yields themselves.

Telstra Group Ltd (ASX: TLS)

Telstra’s leading position in the Australian mobile space is not new, but the company’s focus on growing dividends is a relatively new development.

I’d rather have a good yield with growing payments than a huge yield and no growth (with a higher risk of dividend reductions).

Telstra is in a much better position now that the NBN transition has finished and there’s ongoing adoption of 5G by the nation. It has the widest network coverage and seemingly a very reliable connection.

The ASX blue-chip share’s outlook is positive – user numbers on the network continue to grow and Telstra is capitalising on its market position with price increases, which is driving mobile earnings higher.

Analyst projections on CommSec suggest the business could pay an annual dividend per share of 20 cents in FY26. That would be a grossed-up dividend yield of around 6%, including franking credits.

I’m optimistic that the business can claim a larger market share in home and small business broadband that is powered by 5G. For each connection, Telstra captures the margin that’s currently going to the NBN. This could help increase its profitability, which would be helpful for the dividend.

Coles Group Ltd (ASX: COL)

Coles is a leading supermarket business which is currently delivering faster growth than Woolworths Group Ltd (ASX: WOW) thanks to its product offerings and value. The business also operates a number of liquor companies including Coles Liquor and Liquorland.

The ASX blue-chip share has invested heavily in new automated distribution centres (ADCs) from Witron as well as customer fulfilment centres (CFCs). This is helping improve the company’s efficiencies and stock management, as well as driving e-commerce capabilities.

In the first quarter of FY26, supermarket sales excluding tobacco grew 7%, while e-commerce sales soared 27.9%.

The boost to cash flow after the completion of the distribution centres will help fund larger dividend payouts in the next few years. Its base earnings are very defensive thanks to the integral nature of what it sells.

The forecast on CommSec suggests the business could pay an annual dividend per share of around 79 cents in FY26, translating into a grossed-up dividend yield of 5.3%, including franking credits.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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 positions in and has recommended Telstra Group and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.