There are a number of great ASX shares with high dividend yields worth knowing about. Australian companies can be some of the best options for passive income due to their generous dividend payout ratios and the bonus of franking credits.

We’re going to look at two ASX dividend shares with exceptionally high dividend yields. They offer significantly more income than the current interest rate on cash in the bank.

Below are two of my favourite ideas for large dividend yields.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is a listed investment company (LIC) offering shareholders a large and growing dividend.

Instead of being managed by one fund manager, this LIC’s money is managed by 16 different fund managers who all work for free so that Future Generation Australia can donate 1% of its net assets each year to youth charities – a great initiative.

This portfolio is significantly less exposed to the largest 10 businesses on the ASX, making it much more diversified, in my opinion. It gives exposure to more than 430 underlying securities.

Future Generation’s portfolio has outperformed the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA), returning an average of 0.9% per annum more than the index between inception in September 2014 and May 2026. I think it helps to look at smaller, faster-growing businesses.

The solid investment returns have allowed this ASX share to steadily increase its payout each year since 2015 – that’s a decade of dividend growth! The business recently announced a 5.5% increase of its interim dividend and gave guidance of an annual dividend per share of 7.6 cents per share for FY26.

In other words, it’s guiding it will pay a grossed-up dividend yield of around 8% for 2026, including franking credits.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is the other ASX share I want to highlight. It’s also a LIC, targeting the most exciting undervalued growth opportunities in the Australian microcap market.

As an example of the businesses in the portfolio, some of its current holdings include Artryra Ltd (ASX: AYA), Beacon Lighting Group Ltd (ASX: BLX), EchoIQ Ltd (ASX: EIQ), FINEOS Corporation Holdings PLC (ASX: FCL) and Kogan.com Ltd (ASX: KGN).

Its investment performance has been solid, with its portfolio delivering an average return per year of 14.4% since inception in June 2017, before fees, expenses and taxes.

Due to that high level of passive income, the business has regularly increased its annual dividend since FY18, with no dividend reductions during that period (along with a few special dividend payments).

WAM Microcap has provided guidance that it will pay an annual dividend per share of 10.7 cents in FY26. That translates into a grossed-up dividend yield of 10.5%, including franking credits, at the time of writing. It’s hard to find a business with a consistent dividend that has a larger yield than that.

These aren’t the only businesses offering appealing dividend income on the ASX.

The post 2 ASX shares with dividend yields above 7.5% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia and Wam Microcap. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended FINEOS Corporation and Kogan.com. The Motley Fool Australia has positions in and has recommended FINEOS Corporation. The Motley Fool Australia has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

While the Australian Age Pension is one of the most generous in the world, I’d rather rely on quality, high-yield ASX dividend stocks.

I enjoy owning businesses that are able to provide a good level of passive income and payout growth over time.

Australian Foundation Investment Co Ltd (ASX: AFI) is one of the ASX dividend stocks I’d be comfortable relying on, though it wouldn’t be the only one. I believe it’s important to have a diversified portfolio when it comes to dividends.

There are a few aspects that make the listed investment company (LIC) an appealing option.

Diversification

If I had to rely on an ASX dividend stock to continue paying passive income across all economic conditions, I’d pick an investment with the ability to pay resilient passive income.

Some older Australians who may have relied on dividend income from large ASX bank shares and ASX mining shares may already have seen their payouts cut this decade. At the start of the 2020s, we saw COVID-19 impact bank payouts. Iron ore price volatility has led miners to reduce their payouts.

The AFIC business model is about giving investors exposure to a portfolio of ASX blue-chip shares, allowing the LIC can provide investors with a mixture of passive income and long-term capital growth.

Some of the positions in the portfolio include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Transurban Group (ASX: TCL).

But, it owns plenty of other ASX shares in the portfolio too.

High-yield ASX dividend stock

One of the most appealing aspects of Australian Foundation Investment Co is the pleasing level of passive income it can provide to our bank accounts.

The business has been very consistent with its payout this century, giving investors a high level of income security.

AFIC recently announced that it intends to declare a final dividend of 14.5 cents per share, as well as a special dividend of 2.5 cents per share.

That means its regular dividend for FY26 equates to a grossed-up dividend yield of 5.5%, including franking credits, at the time of writing. Including special dividends, its payout translates into a grossed-up dividend yield of 6.5%, including franking credits.

While the company’s regular annual dividend isn’t increased every single year, it has increased regularly since FY22.

Low costs

The LIC has one of the lowest costs in the country when it comes to the annual management costs. That’s important because it significantly helps the net return of the portfolio.

The high-yield ASX dividend stock has an annual management fee of 0.16%, which means most of the returns are staying in the hands of investors rather than being lost to management fees or performance fees.

With a solid long-term portfolio net return, the business has built an excellent profit reserve, enabling the business to continue paying good dividends in the long-term.

How many AFIC shares would it take to match the Age Pension?

Right now, the maximum Age Pension for a single person is approximately $31,200 annually.

To receive $31,200 annually from AFIC (excluding special dividends), an investor would need 117,736 Australian Foundation Investment Co shares based on the expected FY26 payout excluding the franking credits and 82,416 AFIC shares including the franking credits.

I’d suggest Australian investors should have more than just one high-yield ASX dividend stock in a portfolio, though AFIC would be an effective inclusion, in my opinion.

The post 117,736 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target an $11,000 monthly passive income?
• AFIC reveals 2026 dividend plans for shareholders
• 2 ASX blue-chip shares offering big dividend yields

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

Ioneer Ltd (ASX: INR) shares have been strong performers over the past 12 months.

During this time, the ASX lithium share has risen a sizeable 45%.

But if you thought the gains were over, think again! 

Why this ASX lithium share could keep rising

Bell Potter was pleased to see the lithium developer announce agreements with the Korea Overseas Infrastructure & Urban Development Corporation (KIND) and Hyundai Engineering. The broker believes it is a testament to the quality of the company’s Rhyolite Ridge project. It said:

While the engagement remains non-binding, the calibre of and the commentary from these counterparties provides a strong endorsement of INR’s Rhyolite Ridge project development pathway. The MOUs are clearly part of INR’s Strategic Partnering Process to introduce new project-level equity funding in support of a Final Investment Decision. 

Rhyolite Ridge is fully permitted; an October 2025 project economic update outlined potential production of 27.8ktpa lithium hydroxide and 135.5ktpa boric acid at a capital cost of US$1.7b and with a lithium AISC of US$4,628/t LCE (net of boron coproduct credits). The project is also backed by a US$996m US Department of Energy concessional loan. With cash of US$62m (31 March 2026), INR is fully funded to FID.

Big potential returns

In response to the news, Bell Potter has retained its speculative buy rating and 40 cents price target on the ASX lithium share.

Based on its current share price of 14.5 cents, this implies potential upside of 175% for investors over the next 12 months.

Commenting on its investment thesis, Bell Potter said:

Rhyolite Ridge is strategically important as a fully permitted, near-term and USlocated source of lithium and boron supply. Both lithium and boron are USGS-designated critical minerals. Rhyolite Ridge received development approval in October 2024 and engineering design is 70% complete. Lithium markets have recently strengthened, and we expect that continued growth in underlying demand and limited new sources of supply will support lithium chemicals prices over the medium to long term. Our INR valuation is $0.40/sh. 

Key INR value catalysts are the outcomes of the Strategic Partnering Process in the lead-up to a Final Investment Decision and commencement of development, all expected in 2H 2026. INR is an asset development company with forecast cash flows only; our Speculative risk rating recognises this higher level of investment risk and share price volatility.

The post Why this red hot ASX lithium share could rise 175% appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.