I’ve chosen a few ASX shares to be key sources of dividend income from my portfolio. There are four names that currently account for around 75% of the passive income I receive.

I’m a big fan of dividend income because I can use that cash flow in my own life to pay for discretionary spending or essentials. It’d be great if, one day in the future, my total dividends could cover my mortgage payment. I’m not there yet, though.

Australians can receive an elevated level of dividend income from their ASX investments thanks to the benefit of franking credits. These are refundable tax credits that can reduce the tax owed or increase the tax refund for individuals.  

I don’t pick an investment just because of franking credits. I’ll mention that I’m also a fan of exchange-traded funds (ETFs) and real estate investment trusts (REITs) that don’t attach franking credits to their payments.

There are a few factors that I do look for when considering ASX dividend shares.

I want to see that the investment has a compelling outlook to increase its underlying value over time, whether that’s earnings growth, rental profit growth or growth in its net tangible assets (NTA) per share.

I like to see a track record of dividend growth because it shows reliability and the board’s commitment to paying shareholders passive income during uncertain economic times.

I’d also like to see a solid starting dividend yield. If I’m investing for passive income, I want to see a good level of dividends in the first year of ownership and growth from there. But I’m wary of investments that pay huge yields because that could be unsustainable.

With those goals in mind, let’s run through which ASX dividend shares I’m confident will continue to play a huge role in my household’s cash flow. I’ll go through them in alphabetical order.

L1 Long Short Fund Ltd (ASX: LSF)

This first ASX dividend share is a listed investment company (LIC). I like the LIC structure because it can provide a winning combination of diversified investment exposure, growing dividends, a good dividend yield and capital growth, as long as the portfolio performs.

There are a variety of LICs that follow different investment strategies. I like the L1 Group Ltd (ASX: L1G) strategy of avoiding what the investing crowd is chasing. Growing businesses with low price/earnings (P/E) ratios can deliver strong returns if bought at the right time.

L1 Long Short Fund looks at both ASX shares and international shares for investment opportunities, using both ‘long’ investing and short selling to find stocks that could deliver returns.

I like how it’s willing to look beyond the tech and banking sectors, which dominate the global and ASX markets, respectively. Its three most fruitful sectors for returns have been materials, industrials and communication services.

Past performance is not a guarantee of future performance, but its portfolio has produced an average return of 15% per year in the last five years and 20.4% per year in the last seven years. That shows it can perform strongly by picking stocks some investors may avoid.

It started paying a dividend in 2021 and has increased the payout each financial year since. If it continues the same progressive dividend policy, its next quarterly dividend is likely to be 11.4% higher than the quarterly payment 12 months prior. I’d say that’s a solid growth rate.

I expect the next 12 months of dividends will total at least 16.2 cents per share, which translates into a grossed-up dividend yield of 5.25%, including franking credits, at the time of writing.

MFF Capital Investments Ltd (ASX: MFF)

This second ASX dividend share is another LIC.

It targets a portfolio of high-quality shares that have strong competitive advantages and an above-average outlook for profit growth.

MFF is willing to invest anywhere in the world if it finds an opportunity. Its portfolio includes some of the strongest businesses in the international stock market, including several leading US tech giants, among other names.

Over time, the shares in the portfolio may change, but I expect the LIC’s holdings will collectively continue to deliver pleasing results (with both profit growth and capital growth).

It has grown its annual regular dividend nine years in a row and it has provided dividend guidance that suggests it will reach a decade of continuous growth. MFF expects to pay a half-year dividend of 12 cents per share and I expect the full-year dividend will be 25 cents per share.

At the time of writing, that potential payout translates into a grossed-up dividend yield of 7%, including franking credits, at the time of writing.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I’ve held this ASX dividend share longer in my portfolio than any other stock. It’s an investment house that has operated for more than 120 years.

The business has built an impressive and diversified portfolio of assets that are largely defensive and generate resilient cash flow. It’s invested across areas such as energy, swimming schools, telecommunications, agriculture, real estate, building products, electrification, financial services, credit, fixed income and more.

Its defensive and growing cash flow has allowed Soul Patts to increase its annual dividend every year since 1998, which is the best record on the ASX for consistent dividend growth.

The company has also delivered shareholders some sort of dividend every year since its listing in 1903, including through the world wars and major economic declines.

Soul Patts doesn’t pay out all of its cash profit each year – it’s currently retaining approximately a quarter of its cash earnings to re-invest in more opportunities and grow the portfolio value.

Its FY26 payout translates into a grossed-up dividend yield of 3.4%, including franking credits, at the time of writing.

WCM Global Growth Ltd (ASX: WQG)

The final ASX dividend share I want to highlight is another LIC, which is managed by fund manager WCM. WCM is based in Laguna Beach, California, a deliberate choice to be far from Wall Street culture in New York.

WCM Global wants to find quality global stocks. Its portfolio is spread across the world, mostly in the Americas, Europe and Asia Pacific – I like the diversification that can provide our portfolios.

There are two features that WCM wants to see from its stock picks.

It wants to find businesses with a widening economic moat (improving competitive advantages, measured by a strengthening return on invested capital (ROIC)).

WCM also wants to see evidence that the business has a corporate culture that supports the strengthening of the economic moat, which is an essential ingredient for long-term success.

The ASX dividend share has increased its payout every financial year since FY19, and it’s now increasing the payout each quarter. The next year’s dividend is guided to be 10.1 cents per share, which translates into a grossed-up dividend yield of 7.3%, including franking credits, at the time of writing.

I think all four of these stocks have a very promising future for dividend growth and total returns. I’d be very happy to buy shares today, and I plan to buy more in the coming weeks and months. I’ve also got my eyes on a few other investments.

The post 75% of my dividends come from these 4 ASX shares (and I want to buy more) appeared first on The Motley Fool Australia.

More reading

• Why this ASX dividend share is a retiree’s dream for 2027
• How much is needed in superannuation to target a $7,500 monthly passive income?
• The 3 factors that have helped me build a six-figure ASX share portfolio at 35
• CBA vs Soul Patts: Which ASX share wins in 2026?
• How much is needed in superannuation to target a $100,000 annual passive income?

Motley Fool contributor Tristan Harrison has positions in L1 Group, L1 Long Short Fund, Mff Capital Investments, Washington H. Soul Pattinson and Company Limited, and Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Mff Capital Investments and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Aurizon vs Atlas Arteria shares: Which high-yield ASX 200 stock is better for safe passive income?

Thinking about parking your hard-earned cash in a top-yielding ASX 200 stock for some peace-of-mind passive income? Aurizon Holdings Ltd (ASX: AZJ) and Atlas Arteria Ltd (ASX: ALX) are both popular picks among income-focused investors, and each has its loyal fan base. But when you’re weighing up Aurizon vs Atlas Arteria shares, which one stands out as the better option for those craving a regular, reliable dividend stream? Let’s break down the essentials.

The case for Aurizon

Aurizon is Australia’s largest rail freight operator, moving a hefty volume of commodities—like coal, grains, iron ore, and more—across the country’s vast rail and road network. The company operates three main segments: Network (which covers the regulated coal rail infrastructure in Queensland), Coal (for coal haulage), and Bulk (for diversified freight, recently boosted by the acquisition of One Rail). With over 2,600km of essential rail track under a 99-year lease, Aurizon sits at the heart of Australia’s commodity supply chain.

A few things jump out from the numbers:

• Market cap sits at $6.31 billion, making Aurizon a sizeable player on the ASX.
• Its dividend yield of 6.08% stands comfortably above the market average, and franking sits at 90%—a real plus for Aussie investors chasing after those valuable franking credits.
• The company’s latest reported earnings per share is $0.211, supporting a dividend per share of $0.23, and giving a P/E ratio of 17.91.

Recent dividend history shows Aurizon paying semi-annual dividends, with franking levels mostly between 60% and 100%. This track record of regular payments, plus relatively high franking, gives some comfort to investors seeking steady, tax-effective income.

The case for Atlas Arteria

Atlas Arteria operates in a different world: international toll roads. The business was spun out of Macquarie Infrastructure Group and owns interests in five toll roads across France, Germany, and the United States. Its core asset is a substantial stake in APRR, a major French toll road network with long-dated concessions, and it also owns the Dulles Greenway in the US.

On the income front, Atlas Arteria goes big:

• Its market cap is $5.49 billion, slightly smaller than Aurizon.
• The dividend yield—at a mouth-watering 10.31%—is one of the highest on the index right now.
• However, ALX dividends are unfranked, which may make a difference for investors comparing take-home income after tax.
• Earnings per share are $0.077, with a dividend per share of $0.40. The P/E ratio is 50.39—a lot higher than Aurizon’s.

Atlas Arteria has a long-standing history of semi-annual, sizeable cash dividends, but none of its payments are franked. For yield hunters, though, the cash on offer is hard to ignore.

Valuation comparison

Here’s a side-by-side look at the key numbers:

Metric	Aurizon Holdings	Atlas Arteria
Market Cap	$6.31 billion	$5.49 billion
P/E Ratio	17.91	50.39
Dividend Yield	6.08% (90% franked)	10.31% (unfranked)
Dividend per Share	$0.23	$0.40
Earnings per Share	$0.211	$0.077

Note: Atlas Arteria’s reported P/E ratio may be based on a different earnings measure (for example, underlying or forward earnings) than the EPS shown here, which is why these figures may not quite line up mathematically.

Aurizon trades on a much lower P/E and higher EPS, but Atlas Arteria counters with a far higher cash yield—though without franking credits.

Which is the better buy?

If I’m picking between these two giants for a safer, sustainable passive income stream, my vote goes to Aurizon.

Here’s why: Although Atlas Arteria offers a juicier headline yield at over 10%, those dividends are fully unfranked, so the income may end up being less tax efficient for Aussie investors once you factor in personal rates. Meanwhile, Aurizon’s 6.08% yield is nearly all franked—making the take-home cash for Australian taxpayers potentially much higher. Aurizon also sports a lower P/E ratio, suggesting the market isn’t demanding such a sky-high price for its profit.

Atlas Arteria’s impressive dividend looks tempting, but that P/E is elevated relative to Aurizon. Without multi-year earnings trend data here, it’s tough to dig deeper, but the numbers nudge me toward Aurizon as the more balanced, reliable passive income play in this match-up.

The post Aurizon Holdings vs Atlas Arteria: Which ASX 200 high-yield share wins for reliable passive income? appeared first on The Motley Fool Australia.

More reading

• 3 great ASX dividend shares with 7%+ yields
• How much is needed in superannuation to target $2,000 a week in passive income
• If I invest $15,000 in Atlas Arteria shares, how much would I get in dividends?
• Here are the top 10 ASX 200 shares today
• Atlas Arteria flags French tax hikes may impact toll road revenues

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 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. 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.

There are plenty of ASX shares that could deliver strong growth over the next few years.

But I particularly like businesses that have already built something successful and still have plenty of room to expand.

Here are three ASX growth shares I would be happy to buy today and hold for many years.

Breville Group Ltd (ASX: BRG)

Breville is one of my favourite examples of an Australian business that has successfully taken its products to the world. The company has built a reputation in premium kitchen appliances, particularly coffee machines.

What I like is how Breville has positioned itself in a market where customers are often willing to spend more for better equipment.

Making coffee at home has become a serious hobby for many people, and Breville has developed products catering to everyone from beginners to enthusiastic home baristas.

I also think there is considerable potential for Breville to build on its international success. The company already has a presence in major markets, but there are still countries where its brands have room to become more established.

Of course, premium appliances are discretionary purchases, so weaker consumer spending can affect sales. But over the next decade, I think Breville has a realistic opportunity to become a much larger global business.

Xero Ltd (ASX: XRO)

Xero is another ASX growth share I would be comfortable backing for the long term. One thing I particularly like about the accounting software provider is how important its platform becomes to customers once they start using it.

A small business might initially sign up to manage its accounts, but over time it can begin using Xero for invoicing, payroll, payments, and other financial tasks.

Accountants also become familiar with their clients’ systems, making the platform an important part of how businesses manage their finances.

I think that creates valuable customer relationships that can last for years. It also gives Xero opportunities to generate more revenue from customers as they adopt additional services.

The acquisition of Melio is particularly interesting because it strengthens Xero’s payments offering and could help accelerate its expansion in the United States.

There are execution risks and artificial intelligence (AI) could be a threat. But with millions of small businesses around the world still relying on older systems, I think Xero has a substantial market opportunity ahead.

Sigma Healthcare Ltd (ASX: SIG)

My final pick is Sigma Healthcare, which I think could look considerably different by 2035.

The combination of Sigma and Chemist Warehouse has created a business with an extensive pharmacy retail network and substantial pharmaceutical distribution operations.

I am particularly interested in its international ambitions. Chemist Warehouse has already demonstrated that its retail model can work outside Australia, and there could be significant opportunities to build its presence in new markets over time.

Healthcare and pharmacy spending should also benefit from ageing populations and ongoing demand for medicines and related products.

I think this positions Sigma to grow into a much larger company over the next decade.

Foolish takeaway

I would be happy owning all three shares for the long term.

Each has an established business and opportunities to grow well beyond its current size.

For me, the prospect of seeing what these companies could become over the next five to ten years makes them worth buying and holding today.

The post Why these are my favourite ASX growth shares to buy and hold appeared first on The Motley Fool Australia.

More reading

• 9 ASX 200 shares experts are backing for growth amid market weakness
• I investigated 3 ASX shares that have fallen sharply. Are they bargains or value traps?
• Droneshield vs Xero: Which ASX tech stock is the better buy for a young growth investor?
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Xero, Ansell, Wesfarmers shares

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 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.