ASX blue-chip shares can be among the best options for passive income because of both their dividend yields and the stability they provide.

Businesses that are market leaders in their sector can be a very effective choice because they are much stronger than competitors, with scale and margin advantages.

The two businesses below have a strong track record of paying dividends, and I expect compelling dividend payouts in the months and years ahead.

JB Hi-Fi Ltd (ASX: JBH)

JB Hi-Fi is one of the leading retailers in Australia and New Zealand, with its JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and E&S Trading businesses.

The ASX blue-chip share is arguably the market leader in electronics and appliances in Australia, and it continues to work on improving its position through new stores, increased scale, and a low-cost operating model.

JB Hi-Fi has grown its annual dividend in most years over the last 13 years, which is impressive to me for a retailer.

The business doesn’t typically trade on a high price/earnings (P/E) ratio, which means its dividend yield can be attractive.

According to Commsec’s projection, the business is forecast to pay an annual dividend per share of $3.38 in FY26. That translates into a possible grossed-up dividend yield of 5.9%, including franking credits.

Electronics and appliances remain an essential element for many households, so I expect the company can deliver fairly defensive earnings during this period of higher inflation and interest rates (again).

Telstra Group Ltd (ASX: TLS)

Telstra is Australia’s leading telecommunications business with the most subscribers, the widest network coverage and seemingly the best spectrum assets to deliver its service.

The ASX blue-chip share has leveraged its market position in Australia with regular price increases. Unlocking more revenue from the same number of subscribers should improve its margins, since costs aren’t increasing at the same pace.

Australia is becoming increasingly digital for households, businesses and government, which gives the company defensive earnings. Plus, Australia’s growing population gives the business a tailwind to win more subscribers.

According to Commsec’s projection, the business is forecast to pay an annual dividend per share of 21 cents in FY26. That translates into a possible grossed-up dividend yield of 5.8%, including franking credits.

The business has a strong chance of increasing its dividend in FY27 and is expected to raise its annual payout to 21.5 cents per share, according to projections on Commsec.

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Xero Ltd (ASX: XRO) share price has been one of the worst performers in the S&P/ASX 200 Index (ASX: XJO) in recent history. In the last year alone (at the time of writing), the Xero share price has dropped more than 60%, as the below chart shows.

As an accounting software business, Xero has been one of the victims of the big decline in investor confidence surrounding software companies.

But, I think the business has been significantly oversold, and now looks very good value for three reasons.

Ongoing revenue growth

Firstly, the decline in the share price suggests a bleak future. However, while we can’t know for certain what the future holds (positively or negatively), revenue (and subscriber) numbers remain solid because of a few different elements.

The company recently reported its FY26 results for the 12 months to 31 March 2026. Its customer numbers grew 11% to 4.92 million. Growth is accelerating – its net customer additions (excluding removed long idle subscriptions) improved by 22% to 506,000. That’s a lot of extra revenue flowing through the business!

Its average revenue per user (ARPU) continues to grow thanks to regular price hikes, which isn’t materially hurting the loyalty of subscribers. ARPU rose 23% to $55.44 during the FY26 period.

Those subscribers likely see the huge time-saving and efficiency tools Xero provides as a great benefit. Time-poor business owners (and accountants and bookkeepers) want to complete tasks as quickly as possible.

Thanks to those revenue growth benefits, its annualised monthly recurring revenue (AMRR) jumped 37% to $3.27 billion, and the total lifetime value (LTV) of customers increased 17% to $21 billion.

US expansion

Xero has built a significant market position in New Zealand, Australia and the UK. It also has a growing presence in countries like Singapore, South Africa and Canada.

However, it has struggled to gain much of a foothold in the US, which is a huge market if Xero can get it right. It’s difficult to break into a market that already has such embedded incumbents.

The acquisition of small and medium business payments company Melio may have been costly, but it could unlock the growth and access to more subscribers that Xero has hoped for.

In FY26, it reported US revenue growth of 240% (30% on an organic basis, excluding Melio). If it can continue to grow US revenue in the double digits, I think it has a very good future.

Long-term profit potential

Profitability took a hit in FY26 due to Melio-related acquisition costs, but I think the long-term outlook looks very promising for continued profit growth in the coming years.

As a software business, the company has a lot of operating leverage – its revenue can increase at a much faster pace than its expenses, in a normal financial year.

As revenue continues to grow, I expect earnings to grow quickly. Despite profit headwinds in FY26, free cash flow increased 9% to $554 million. The company can use the rapidly rising cash flow to pay dividends and/or make more bolt-on acquisitions.

For me, long-term profit growth is the key reason I’m interested in the Xero share price.

I think Xero is a very exciting ASX share to own, though it’s not the only stock I’d buy today.

The post 3 reasons why the Xero share price is a buy in July 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Pro Medicus Ltd (ASX: PME) share price has been an incredible performer over the last five years, rising by 230%. The Australian stock’s return would have been much stronger if the end date of this measure had been July 2025, as it was above $330 at that stage.

As the above chart shows, it’s actually down 40% since that July 2025 peak. So, after significant volatility over the past year, is it good value or overvalued?

Let’s take a look at what analysts think of the business at its current valuation.

Expert views on Pro Medicus shares

According to CMC Invest, there have been 10 analyst ratings on the business. Of those ratings, nine were buys, and one was a hold.

Clearly, investors are feeling very positive about the business right now, though it has already regained some of its lost ground after rising more than 40% over the last month.

Experts still think the Pro Medicus share price could rise from here. The average price target of those 10 ratings is $203.15. That suggests it could rise more than 7% in the next year.

The most optimistic price target is $245.13, suggesting it could rise another 30% from where it is at the time of writing.

Why is the Australian stock still attractive?

The business has continued to deliver excellent financials for shareholders, which is the only thing Pro Medicus can truly control.

Its operating profit (EBIT) remains one of the highest on the ASX. This means much of the new revenue it’s winning is turning directly into usable EBIT that can help grow the bottom line, pay larger dividends, and/or strengthen the balance sheet.

The company continues to win new and renew existing contracts from valuable clients, giving it tailwinds for shareholder returns.

Additionally, Pro Medicus continues to strive to offer the best service, which is why it recently announced it’s exploring a partnership with EchoIQ Ltd (ASX: EIQ) to provide Pro Medicus customers with AI-powered cardiovascular diagnostic technology. Cardiology could be a great growth avenue for Pro Medicus.

The company’s earnings per share (EPS) is expected to continue rising at a strong pace. According to Commsec’s forecast, the business is projected to grow EPS by around 30% in FY27 and by another 25% in FY28.

Can any other very profitable S&P/ASX 200 Index (ASX: XJO) share grow EPS as much in percentage terms between FY26 and FY28? Time will tell, but I think the Australian stock has a very promising future.

The post Up 230% in 5 years! Is this still a top Australian stock to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.