Where I’d invest on the ASX for passive income right now

If I’m looking for passive income from the share market, I would focus on businesses that can generate steady cash flow and return it to shareholders consistently over time.

That would likely lead me toward companies with strong positions in their industries and earnings that can support reliable dividends.

Here are four ASX shares I would look at right now.

BHP Group Ltd (ASX: BHP)

BHP is one of the first names that comes to mind for passive income.

It generates significant cash flow from its large-scale mining operations and that flows through to dividends when conditions are supportive.

I also like the direction the business is heading. Copper is becoming a bigger part of the story, which ties into long-term demand from electrification and infrastructure.

There is also future growth from potash, which could add another layer to earnings over time.

Overall, I think this makes the mining giant a great option for an income portfolio.

Telstra Group Ltd (ASX: TLS)

Telstra is another ASX share that could be a good candidate for a passive income portfolio.

The telco leader operates in an essential industry, with customers relying on its network every day. That creates recurring revenue, which helps support its dividend.

In addition, the business continues to invest in its network, which supports its position and earnings over time.

As a result, I see this as one of the steadier income options on the ASX.

Macquarie Group Ltd (ASX: MQG)

Macquarie adds something different to the mix.

Its earnings come from a range of activities, including asset management, infrastructure, and financial services. That diversification can support income over time, even as different parts of the business move through cycles.

I also like how the company allocates capital. It has a long history of identifying opportunities and building new earnings streams, which can support both growth and dividends.

Coles Group Ltd (ASX: COL)

Coles is a business I associate with consistency.

People continue to spend on groceries regardless of the broader environment, and that helps support steady revenue and earnings.

The company is also busy investing in its supply chain and operations, which can improve efficiency over time.

I think that combination makes it a reliable and defensive option when I’m thinking about income.

Foolish takeaway

If I were building a passive income portfolio, I would focus on businesses that can keep generating cash and returning it to shareholders over time.

These companies each bring something different, but they all have the ability to support income through a range of conditions, which is what I would look for in this part of the market.

The post Where I’d invest on the ASX for passive income right now appeared first on The Motley Fool Australia.

More reading

• Forget BHP shares! Buy these ASX dividend shares instead for passive income
• Up 22%, are Telstra shares still worth a buy?
• 3 ASX shares I’d feel comfortable holding for the next decade
• 3 reasons to buy Coles shares today
• Forget CBA shares — here are 2 ASX bank shares I’d rather own right now

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