The ASX dividend share Future Generation Australia Ltd (ASX: FGX) could be one of the best choices that Aussie retirees could make. It offers numerous benefits to investors focused on passive income, as well as people who want diversification.

Future Generation Australia is a name I’ve had in my portfolio for several years already and I plan to continue holding it for a few different reasons.

Let’s look at why it’s such a compelling reason for retirees to buy for the long-term.

Diversification

Future Generation Australia is a listed investment company (LIC) that is invested in the funds of fund managers like Paradice, L1 Group Ltd (ASX: L1G), Wilson Asset Management, Vinva, Eley Griffiths and so on.

All of those find managers work for free so that Future Generation Australia can donate 1% of its net assets each year to youth charities, including Giant Steps, Mirabel Foundation, Raise, Karinyahouse and Lighthouse.

By being invested in so many different fund managers, the ASX dividend share gives investors exposure to more than 430 businesses.

I think it really ticks the diversification box, while also giving more market capitalisation diversification.

Around 19% of the portfolio is invested in companies outside of the S&P/ASX 300 Index (ASX: XKO), showing that the LIC can give exposure to some of the smaller and more growth-orientated stocks in Australia – I think this is a key reason why Future Generation Australia’s portfolio has beaten the return of the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA) by an average of around 1% per year.

Large dividend yield

One of the main reasons to like this ASX dividend share is its strong dividend yield. There are few businesses that I’d be more willing to invest in for a large dividend yield than Future Generation Australia.

The business expects to pay an annual dividend per share for 2026 of 7.6 cents. At the time of writing, that translates into a grossed-up dividend yield of 8%, including franking credits.

In my view, that’s a far better yield than what term deposits and most other ASX blue-chip shares have to offer.

Growing payouts

Another reason for retirees to love this business is that it has regularly increased its annual dividend for investors. It has increased its annual payout each year since 2015, so 2026 is more than a decade of increases.

Dividend growth is not guaranteed, of course, but with Future Generation Australia’s impressive track record and profit reserve of 41.8 cents per share, I think it’s well positioned to continue growing dividends in the next few years.

Over the long-term, I think Future Generation Australia can continue to deliver rising payouts for retirees and other shareholders.

The post Why this ASX dividend share is a retiree’s dream for 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia. 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.

Westpac Banking Corp (ASX: WBC) shares usually come with a pleasing level of passive income, more than what someone could get from a term deposit.

It’s a good idea to remember that Westpac wants to keep shareholders happy, so dividends are likely to keep flowing unless something goes really wrong, like we saw at the start of 2020.

Westpac is one of the leading ASX bank shares, along with names like Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Macquarie Group Ltd (ASX: MQG) and ANZ Group Holdings Ltd (ASX: ANZ).

By owning enough Westpac shares, an investor could generate $1,000 of passive income, or even more.

What would it take to create $1,000 of passive income?

Westpac’s dividends have been stable (with a little bit of growth) over the last couple of years. I think it’s likely the ASX bank share will aim to continue gradually increasing its payouts in the coming years.

According to Commsec’s projections, Westpac is forecast to slightly increase its annual payout in FY27 to $1.55 per share. That translates into a grossed-up dividend yield of 6.1% with franking credits and 4.2% without.

If an investor wanted to receive $1,000 of dividend income, it’d take 646 Westpac shares. If we include the franking credits as part of the income, it’d take 452 Westpac shares to generate that level of income based on the projected payout for FY26.

At the time of writing, that means an investor would need to invest approximately $23,600 or $16,500, depending on whether franking credits are included.

Is this a good time to invest in Westpac shares?

Analysts are not convinced that the Westpac share price is good value, despite the fact that it’s down more than 10% since the 2026 high in April 2026.

According to CMC Invest, there have been eight analyst ratings on the ASX bank share within the last three months, with three of them being holds and five of them being sells. In other words, not a single buy recommendation among them.

The average price target from those analysts is $32.84, implying a possible decline of 10% from where it is at the time of writing. Therefore, the ASX bank share may not be a great investment to consider today.

According to the projection on CMC Invest, the Westpac share price is now valued at around 18x FY26’s estimated earnings, at the time of writing.

The post How much must I invest in Westpac shares to earn a $1,000 passive income in 2027? appeared first on The Motley Fool Australia.

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• How much passive income can I earn off a $50,000 portfolio?
• ANZ, NAB, Westpac and CBA shares: Brokers rate 2 a sell, and 2 a hold

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

CSL Ltd (ASX: CSL) and Telstra Group Ltd (ASX: TLS) shares offer investors two very different paths.

One is working through a difficult reset, while the other continues to deliver the steadier performance investors expect from a defensive blue chip.

If I could buy only one today, which would I choose?

The case for Telstra shares

I can see plenty to like about Telstra.

Connectivity has become essential to how Australians work, communicate, shop, travel, and access entertainment. That gives the company a level of demand that many businesses would love to have.

Its mobile division remains the main attraction for me. Telstra has continued growing mobile revenue as customers choose its network and accept higher prices, while cost reductions have also supported earnings.

I also value the income profile. Telstra has been growing its dividend, and its cash flow gives investors a degree of stability that CSL cannot currently match.

The trade-off is the valuation. At a share price of around $5.07, Telstra trades on a price-to-earnings ratio of approximately 25.6 times estimated FY26 earnings of 19.8 cents per share. The multiple remains around 25.4 times based on the FY27 consensus estimate of 20 cents.

That feels quite full when consensus forecasts suggest very little earnings growth between those years.

Why CSL shares look more compelling

CSL shares are trading around $122.61, compared with consensus earnings estimates of $8.22 per share in FY26 and $8.36 in FY27.

That places the biotechnology company on price-to-earnings ratios of approximately 14.9 times and 14.7 times, respectively.

Their sectors and earnings profiles are different, so those multiples need context. But even with that caveat, the gap is hard to ignore.

CSL is cheaper because confidence has collapsed.

Management has reduced its outlook, the Vifor acquisition has underperformed, and growth initiatives are taking longer to improve the financial results. The company has also faced challenges involving US immunoglobulin inventories, albumin pricing in China, research productivity, a change of CEO, and operating complexity.

Those problems could continue testing shareholders. However, the current valuation appears to reflect a deeply pessimistic view of what comes next.

CSL still owns a global plasma collection and manufacturing network that has taken decades to build. Demand for immunoglobulin therapies continues to grow, while large numbers of potential patients remain undiagnosed or untreated.

Management is also simplifying the organisation, improving plasma and manufacturing efficiency, and targeting substantial annual savings by FY28.

The recovery may take time, but I don’t think CSL needs to return immediately to its former market valuation for shareholders to do well from here. Better execution and a return to dependable earnings growth could be enough to change sentiment considerably and support a re-rating.

Which share would I buy?

Telstra would be my choice for an investor who prioritises defensive earnings and dividends.

For my own portfolio, I would buy CSL shares.

The biotech carries greater uncertainty, and another disappointment could send the share price lower. In return for accepting that risk, investors are being offered a much cheaper valuation and what I believe is considerably more upside if conditions improve.

Foolish takeaway

Telstra is doing many of the things shareholders would want to see, but its valuation already gives the company credit for that steadiness.

CSL is being priced as though its recent problems will weigh on the business for years. That could happen, although I think the strength of its core operations gives it a credible route back to growth.

I would be happy to own both shares. But choosing just one at current prices, I think CSL offers the more compelling balance between risk and potential reward.

The post CSL vs Telstra shares, which should I buy? appeared first on The Motley Fool Australia.

More reading

• I’d listen to Warren Buffett and buy cheap ASX shares
• How to build an ASX dividend portfolio that keeps paying you for decades
• Down 50%+: Are these ASX healthcare shares finally worth buying?
• Could CSL shares double from here? Here’s what the experts think
• How much is needed in superannuation to target a $100,000 annual passive income?

Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.