2 ASX blue-chip shares offering big dividend yields

Certain ASX blue-chip shares can deliver substantial passive income thanks to their high dividend yields.

One of the best things I like about investing in ASX dividend shares compared to term deposits is that they can deliver both a good payout and dividend growth over time.

I think two of the most underrated businesses for passive income are below.

Argo Investments Ltd (ASX: ARG)

Argo is one of Australia’s largest and oldest listed investment companies (LICs). It aims to invest in a diversified portfolio of ASX shares with a low-cost, internally managed business model. It says it invests with a conservative, long-term approach.

It aims to provide shareholders with both fully-franked dividend income and capital growth, and it has been successful in doing so.

Argo has regularly increased its annual payout over the last two decades, though the COVID-19 period did lead to dividend reductions.

In FY26, the business grew its annual dividend per share by 4% to 38.5 cents. That means the business currently has a grossed-up dividend yield of 6%, including franking credits, which is a great starting dividend yield.

Currently, its biggest investments are BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Rio Tinto Ltd (ASX: RIO), Commonwealth Bank of Australia (ASX: CBA), and Wesfarmers Ltd (ASX: WES).

As you can see, the LIC’s portfolio is full of ASX blue-chip shares, which can provide it with resilient profits and dividends over the long term.

With a low management expense ratio of 0.14%, I’d be happy to invest in this business, which has been running since 1946.

JB Hi-Fi Ltd (ASX: JBH)

The other ASX share I really want to highlight is JB Hi-Fi, one of Australia’s leading retailers of electronics and appliances. It has four businesses – JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys, and E&S.

One of the main reasons why I think the JB Hi-Fi share price is appealing is that the ASX blue-chip share now offers a very large dividend yield. It’s down 40% in the past year, so the dividend yield is much higher.

JB Hi-Fi is projected to pay an annual dividend per share of $3.35 in FY27. That translates into a grossed-up dividend yield of almost 7%, including franking credits. I think that’s an impressive yield considering it has increased its payout most years over the past 15 years.

It’s true the outlook seems difficult for Australian households, so we’ll see how that plays out in the next year or two. But, I think the market is being too pessimistic about the business on a long-term view, particularly considering revenue only fell slightly in Australia at the start of FY27.

If there’s a good time to invest in a retailer like JB Hi-Fi, I think it’s now, given the much better valuation. I think households will continue to buy electronics in the coming year, making it more defensive than ASX investors are giving it credit for.

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 positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool Australia has recommended BHP Group, Macquarie Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.