Is this the best ASX dividend stock to buy for passive income?

The ASX dividend stock Charter Hall Long WALE REIT (ASX: CLW) could be one of the best opportunities for Australians right now.

The real estate investment trust (REIT) may not be as famous as names like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). But, in some ways, Charter Hall Long WALE REIT could be more appealing.

For a few different reasons, I think it’s a better buy for the foreseeable future.

Strong dividend yield

I think the Charter Hall Long WALE REIT dividend yield is very attractive compared to many other ASX dividend stock options.

It’s able to deliver such a good dividend yield because it pays out 100% of its operating rental profit each year, making it a very rewarding holding for passive income.

The business can still experience profit and distribution growth while paying out 100% of its operating profit due to contracted rent increases with its tenants.

It increased its FY26 annual payout by 2% to 25.5 cents per security. That translates into a forward distribution yield of 6.7%, at the time of writing. To me, that’s a much more appealing yield than what CBA or BHP have to offer.

Diversification

One of the best things about this ASX dividend stock is its highly diversified portfolio across multiple property sectors. I like that strategy because it reduces the risk of being overly exposed to one area while also giving it the largest investment hunting ground to find the best opportunities.

The business is invested in a number of defensive tenant industries, including government tenants (such as Geoscience Australia), pubs and hotels, grocery and distribution, telecommunications exchanges, data centres, service stations, food manufacturing, waste and recycling management, and so on.

In terms of tenants, some of its key tenants include government tenants, Endeavour Group Ltd (ASX: EDV), Telstra Group Ltd (ASX: TLS), BP, Coles Group Ltd (ASX: COL), Metcash Ltd (ASX: MTS), Westpac Banking Corp(ASX: WES) and Wesfarmers Ltd (ASX: WES).

Long-term rental income

What links all of the properties in the portfolio together is that they have long-term rental agreements with tenants. As of December 2025, it had a weighted average lease expiry (WALE) of more than nine years.

That means it has close to a decade of rental income already signed with tenants, giving the business compelling security for its future distributions.

Its rental income is steadily growing, with the rent either rising at a fixed rate annually or linked to inflation. With that rental income tailwind, the business has a compelling future, barring the short-term headwind of rising interest rates.

It looks like great value to me after reporting net tangible assets (NTA) of $4.68 per security at 31 December 2025, which means it’s trading at a 19% discount to this.

The post Is this the best ASX dividend stock to buy for passive income? 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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.