The ASX dividend stock Future Generation Australia Ltd (ASX: FGX) is one of my favourite ideas as a high-yield passive income option. On top of that, it’s providing growing dividend payments too. I think it’s a true dividend winner.

Future Generation Australia is a listed investment company (LIC) that invests quite differently from many other LICs.

A typical LIC will usually invest in a portfolio of ASX shares or international shares. This ASX dividend stock operates in a way that adds significant diversification and lower volatility.

Significant diversification

Future Generation Australia invests with a fund-of-funds strategy. It’s invested in the funds of 16 different fund managers, including L1 Group Ltd (ASX: L1G), Vinva, Firetrail, Smallco, Eley Griffiths, and TenCap.

By investing in these funds, the ASX dividend stock’s portfolio is less concentrated on the largest businesses on the ASX than the weightings of the S&P/ASX 300 Index (ASX: XKO).

In other words, Future Generation Australia is much more focused on smaller, faster-growing businesses that could help provide better returns over time.

Additionally, these fund managers don’t charge any management fees to Future Generation Australia for a special reason.

Philanthropic nature

All of the fund managers involved work on a pro bono basis so that the ASX dividend stock can donate 1% of its net assets to charities focused on young Australians.

Some of the current recipients of donations include Australian Children’s Music Foundation, Lighthouse, Mirabel Foundation, Giant Steps, and Raise.

Since inception, Future Generation Australia has donated $54.9 million and each year that figure becomes larger. The LIC is making an important contribution to Australia’s next generation, and I’m glad I’m a shareholder.

Great dividends

There are two reasons why I think this LIC is so appealing for dividends.

First, it offers a very compelling dividend yield. It has provided guidance that it will pay an annual dividend per share of 7.6 cents in FY26.

At the time of writing, that translates into a grossed-up dividend yield of 8.3%, including franking credits.

The second reason to really like the business is that its dividend is consistently growing. It has grown every year since 2015, providing more than a decade of consistent payout increases.

It expects to hike its annual dividend by 5.6% for FY26, which would mean the dividend will have grown by 90% since 2015.

$4,000 investment in the ASX dividend stock

I think now is a good time to invest with the FY26 half-year dividend to go ex-dividend (and be paid) in November.

At the time of writing, an investor can buy 3,065 Future Generation Australia shares with a $4,000 investment, which I think is a solid investment choice.

But it’s not the only ASX share I’d buy for returns right now.

The post $4,000 buys 3,065 shares in an impressively reliable ASX dividend stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia and L1 Group. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Zip vs Block shares: Which payments stock stacks up best?

When it comes to payments stocks on the ASX, Zip Co Ltd (ASX: ZIP) and Block Inc (ASX: XYZ) catch the eye for anyone watching the fast-moving world of digital money and buy-now, pay-later (BNPL) services. With both companies offering innovative ways for consumers and businesses to handle payments, everyday investors might be weighing Zip and Block against each other for their next portfolio move. Here’s how they compare on the fundamentals, value, and recent share price action.

The case for Zip

Zip is an Australian financial technology business focused on disrupting the traditional credit card and payments market. Zip operates in Australia, New Zealand, the United States, and 12 countries altogether, offering point-of-sale credit and BNPL services through products like Zip Money and Zip Pay. Founded in 2013, the company’s core pitch is to give shoppers more flexibility and an alternative to old-school credit cards.

Looking at the fundamentals:

• Market cap stands at $2.58 billion, so it’s a mid-cap ASX player with solid reach.
• Zip’s P/E ratio is 22.63, which is at the lower end for a payments or fintech stock, potentially signalling more attractive value compared to fast-growth peers.
• Earnings per share come in at $0.091, supporting its move toward profitability.

Dividend hunters won’t find much here, though — Zip currently pays no dividend.

The case for Block

Block formerly known as Square, was originally a US payments upstart. Now, it’s a global force in payments tech, offering everything from merchant point-of-sale solutions to Cash App for peer-to-peer payments, as well as hosting platforms like Weebly. In 2022, Block snapped up Aussie juggernaut Afterpay in a headline-making deal, adding serious BNPL firepower to its roster. The business is dual-listed in the US and Australia, catering to a broad investor base.

Key stats for Block Inc:

• Its market cap is a substantial $4.21 billion, making it notably bigger than Zip on the ASX stage.
• The P/E ratio is 132.23, vastly higher than Zip’s, which indicates investors are pricing in a lot of future growth or that current profits are relatively slim compared to the company’s valuation.
• Earnings per share are showing at $0.560.

Block also offers no dividend at this time.

Valuation comparison

With three key valuation metrics available for both, here’s how Zip and Block stack up:

Metric	Zip	Block
Market Cap	$2.58 billion	$4.21 billion
P/E Ratio	22.63	132.23
Earnings per Share	$0.091	$0.560
Dividend Yield	0.00%	0.00%
Year To Date Return	-37.7%	9.0%

Note: Block Inc’s reported P/E appears very high compared to its EPS, suggesting investors are paying a heavy premium for expected growth and the Afterpay component. Both companies are not offering dividends right now.

Recent share price momentum

To line things up evenly, let’s use 2 October 2026 as the most recent shared date both companies have closing prices for. Here’s what the short-term momentum looks like as of that date:

• Zip: Closed at $2.07 on 2 Oct 2026, up 3.5% from the previous close. Despite the daily bounce, its year-to-date return sits deeply in the red at -37.7% — meaning Zip shares have struggled significantly so far this year.
• Block: Closed at $106.62 on 2 Oct 2026, up 0.7% on the day. Block, on the other hand, has delivered a positive year-to-date return of 9.0%, showing stronger recent momentum versus Zip.

Which is the better buy?

Looking at the numbers, I’d lean toward Block as the pick of these two payments stocks right now. The decisive factor for me is the year-to-date performance: Block shares have pushed ahead nearly 9%, while Zip is down a hefty 37.7%. That sort of divergence tells me Block is winning investor confidence and, crucially, executing better in this tough market for fintechs.

Yes, Block’s P/E ratio is sky-high at 132, and that does make me pause — but with its diversified business, global scale, and the Afterpay acquisition now bedded down, I can see why the market is backing Block for future earnings growth. Zip is fighting hard and has managed to move towards profitability, but its steep price decline and smaller scale leave me with less confidence, at least based on the data I have in front of me.

Of course, neither company is paying shareholders a dividend, so it’s really about capital growth potential. On current fundamentals and recent momentum, Block gets my vote as the more compelling buy.

The post Zip vs Block: Which ASX payments share is better? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Laura Stewart 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 Block. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Your superannuation isn’t just a savings pot for retirement; it can also generate a regular passive income to live off when you decide to quit work.

A $100,000 annual passive income generated completely from your superannuation balance is entirely possible.

This type of money sits well above the estimated cost for a comfortable retirement lifestyle. And it means your passive income will cover most of your expenses without needing to draw down aggressively on the rest of your balance. 

In retirement, you can move your superannuation from an accumulation phase to a retirement phase. This is where you can convert your savings into a regular income stream or withdraw lump sums. 

At this point, you can set up your superannuation to provide a regular income from your investment income, leaving the rest largely untouched, or you can withdraw dividend income in lump sums.

But the question is, how much do you need in your super to be able to earn this level of passive income when you transition to your pension phase?

Let’s take a look.

How much do I need in my superannuation to earn an annual passive income of $100,000?

To calculate the amount of superannuation you need, you’ll need to divide your annual passive income by the dividend yield of your portfolio.

The catch is that the answer changes depending on what that yield is.

Generally, as your yield goes up, the passive income you can earn off the same balance also increases.

This means that a portfolio with a dividend yield of say, 3%, generally needs to be double the size of one with a 6% dividend yield in order to earn the same passive income. 

Ok, what if my portfolio yields somewhere between 3% to 6%? How much do I need?

Say your overall portfolio has a dividend yield of around 3%, you’ll need a balance of around $3.3 million to earn $100,000 per year in passive income. That’s because $100,000 ÷ 3% = $3,333,333.

Of course, $3.3 million is a huge balance, and out of reach for most Australians.

But remember, as your yield increases, the required balance goes down. 

For example, if the yield of your portfolio is around 4%, your balance would need to be closer to $2.5 million to earn the same $100,000 annual dividend income.

For a 5% yielding portfolio, you’d need a balance of closer to $2 million.

And then a 6% yielding portfolio could generate $100,000 in passive income from a sound $1.6 million.

Give me some ideas of 4% to 5% yielding ASX shares that I can invest my superannuation in

There are many ASX dividend shares available for superannuation investment, and many of them yield around 4% to 5%.

But here are some of my top picks.

I’d consider defensive shares such as Telstra Group Ltd (ASX: TLS), Transurban Group (ASX: TCL), or Inghams Group Ltd (ASX: ING). 

Otherwise, insurance shares are generally resilient to market volatility. QBE Insurance Group Ltd (ASX: QBE), Medibank Private Ltd (ASX: MPL), and Insurance Australia Group Ltd (ASX: IAG) are all good options in this sector, and they generate a yield of around the 4% to 5% level at the time of writing.

Elsewhere, ASX energy shares are also able to generate reliable dividends for investors. Such as Origin Energy Ltd (ASX: ORG), Contact Energy Ltd (ASX: CEN), or Mercury NZ Ltd (ASX: MCY).

The post How much superannuation do I need to generate $100,000 per year in passive income? appeared first on The Motley Fool Australia.

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