Some ASX dividend shares can provide plenty of passive income thanks to their pleasing dividend yields.

Interest rates have risen, increasing the cash return paid by term deposits, bonds, and so on. However, I think that good ASX dividend shares are even more appealing because they can provide even higher income and growth, and interest rates may not stay this high forever.

I’ll talk about two leading opportunities with dividends above 7%.

Dexus Industria REIT (ASX: DXI)

The first idea I want to talk about is a real estate investment trust (REIT) exposed to one of the best rental subsectors, in my view.

The business owns high-quality industrial warehouses across major Australian cities, providing sustainable income and capital growth over the long term.

Some of those tailwinds include long-term growth of e-commerce and data centres, helping drive the rental value of REITs.

It’s delivering a strong level of rental growth. For FY26, it revealed strong like-for-like portfolio income growth of 5.3%, supported by rental escalations, re-leasing spreads of 21.4% (new rental contracts are earning a lot more than the old contracts), and high occupancy of 98.8%.

The business expects to pay an annual distribution per unit of 16.6 cents. That’s a forward distribution yield of 7.2%.

Pleasingly, its rental income is regularly growing, with around 87% of rental income having fixed rental increases or CPI-linked reviews.

It looks cheap to me; the business reported net tangible assets (NTA) of $3.42 per security as at 30 June 2026.

WCM Global Growth Ltd (ASX: WQG)

The other ASX dividend share I want to highlight is this listed investment company (LIC).

I love particular LICs for their investment styles and the way they can deliver consistent, even growing dividends.

The fund manager WCM has two factors that it looks for to include in the portfolio, which targets international quality shares. It wants to find businesses with a rising competitive advantage (or expanding economic moat) and a corporate culture that supports the expansion of the economic moat.

In other words, the ASX dividend share is looking for great businesses that are set up for long-term success and are becoming increasingly good at what they do.

Impressively, the LIC’s portfolio has returned a net 21.2% per year over the past three years through August 2026, helping fund great dividends. Past performance is not a reliable indicator of future performance, of course.

The company recently paid a quarterly dividend of 2.35 cents per share in September 2026. It expects to hike its quarterly September dividend in a year from now by 10.6%.

Over the next year, it expects to pay quarterly dividends that total 10.1 cents per share. That works out to be a forward grossed-up dividend yield of 7.1%, including franking credits.

I think it’s a great time to invest in these two ASX dividend shares.

The post 2 ASX dividend shares with yields above 7% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. 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.

I’d describe Medibank Private Ltd (ASX: MPL) shares as one of the most underrated ASX dividend stocks for passive income based on three factors, which I’ll get into below.

Medibank Private is one of the largest private health insurers in Australia, with its Medibank Private and ahm brands. It also has a growing (via acquisitions) healthcare division.

It could be a top pick for passive income in the years ahead, generating $200 per month (or more). Let’s look at how that could be done.

Strong and growing dividend

One of the main reasons I think Medibank is an underrated business for dividend income is how consistently it has increased its payout.

In FY26, the business grew its annual dividend per share by 6.7% to 19.2 cents, following a 6.7% rise in the group operating profit to $813.5 million.

At the time of writing, its FY26 grossed-up dividend yield is 6%, including franking credits.

Since it started paying dividends in 2015, the business has increased its payout every year except 2020 due to COVID-related impacts. Therefore, it has increased its payout for six consecutive years, building a solid dividend growth streak.

Further dividend growth is expected in the years ahead.

The projection on CommSec suggests the business could hike its annual dividend by 12% in FY27 to 21.5 cents per share. That would translate into a grossed-up dividend yield of 6.7%, including franking credits.

There are not many S&P/ASX 200 Index (ASX: XJO) shares offering passive income as high as that while also growing the dividend at a good pace.

Rising profits

In my view, the most important element of a growing dividend is that it’s funded by rising profits.

Aside from the tailwind of ageing demographics, the company expects several positives in FY27.

It aims to grow its resident policyholder market share in a “disciplined way”, including improved volume momentum in the Medibank brand.

On top of that, the non-resident private health insurance gross profit is predicted to see “solid” growth in FY27.

The Medibank healthcare segment is forecast to see segment profit growth of around 25% in FY27, including a full-year contribution from Better Medical.

Finally, the company is open to making further acquisitions to boost its business, and it has the financial capacity to do so.

It’s valued at 17 times FY27’s estimated earnings.

$200 per month of passive income

The business doesn’t pay an annual dividend every month, so it’s better to think of the goal as an annual $2,400 target.

The amount of Medibank shares required for the dividend goal depends on whether franking credits are included or excluded. Excluding franking credits, an investor would need 11,163 Medibank shares for the goal. But with franking credits, an investor would only need 6,462 Medibank shares.

I think it’s a solid business to consider for passive income, though it’s not the only ASX stock that could produce good returns.

The post I’d buy 6,462 shares of this ASX stock to aim for $200 a month of 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 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.

Shares in Electro Optic Systems Holdings Ltd (ASX: EOS) are up more than 15% after the company announced it had won a $700 million contract.

The anti-drone technology company said it had struck an agreement with a Middle Eastern gulf state for the provision of a nation-wide, counter-drone defence system valued at £370m (~A$700m).

This is the largest contract secured by the company to date.

Increase in drone warfare driving need for countermeasures

Electro Optic Systems said in a statement to the ASX that recent conflicts in the Middle East had highlighted the importance of being prepared for anti-drone warfare.

The company added:

Drone attacks have inflicted significant physical and economic damage and traditional air-defence systems based on expensive interceptor missiles have faced challenges. More effective and sustainable solutions are being sought. EOS’ NiDAR counter-drone system, acquired as part of the recent MARSS acquisition, is an advanced AI-enabled command and control system (C2), designed specifically for counter drone defence, embracing both airborne and coastal seaborne drone detection. As required, systems fielded by MARSS in the Middle East are showing throughout the recent crisis to be an effective and economical counter-drone system.

Electro Optic Systems said it expected 80% of the revenue to be earned in the first 12 to 24 months after the contract becomes unconditional, with the rest of the revenue related to ongoing support over a four-year period.

The company said it also believed that the deal could lead to future sales opportunities.

Milestones yet to be overcome

Electro Optic Systems has to fulfil certain conditions before the deal becomes unconditional, including obtaining relevant export licences.

The company added:

The Contract is expected to be profitable and cashflow positive over its term, noting that, as is the nature with integration projects such as this, there will be a significant short-term working capital funding requirement in the early stages of the Contract which is expected to turn positive during mid-2027. While noting that the nature of this Contract is similar to others fulfilled by EOS and existing MARSS resources in the Gulf region, EOS believes that this Contract represents an inflection point for the Company in its strategy to become a major player in the global integrated, counter drone market as it represents a significant expansion of both the products and services previously provided.

The company also noted that the contract contained financial and operational risks, “some significant, which EOS will seek to manage”.

Electro Optic Systems shares traded as high as $12.91 on the news before settling back to be 16.3% higher at $12.30.

The company is valued at $2.55 billion.

The post Which ASX drone company is up more than 15% on big contract news? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Electro Optic Systems. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. 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.